Administration Forfeits Key Opportunity to Protect Consumers, Jobs Against Rising Oil Prices

WASHINGTON, DC (August 23, 2005) -- The Bush administration is expected to forego a crucial chance to protect American consumers and improve our long term national security today by proposing miniscule fuel economy performance improvements for the pickups, minivans and SUVs that now comprise a majority of U.S. passenger vehicle sales, according to the Natural Resources Defense Council.

"How many more warnings do we need? This is a paltry gesture that we just cannot afford," said NRDC Senior Scientist Daniel A. Lashof. "The future of our economy is on the line. Now more than ever, we need strong fuel economy performance standards to protect the strength and security of our country."

Despite record oil prices and mounting instability in oil producing countries such as Iraq and Iran, the new administration plan actually is weaker than the modest 1.5 mpg increase proposed by the administration in 2002 -- when oil was selling for $30 a barrel -- and adopted in 2003. Both proposals fall far short of what is both feasible and necessary to meet today's urgent challenge.

"Raising the standard for SUVs and other light trucks by just 1 mile per gallon per year over five years would reduce demand by a million barrels of oil per day by 2020," Dr. Lashof said. "That's about a third of our total daily imports from the Persian Gulf."

The 1-mpg-per-year plan would save more than 22 billion gallons over the lifetime of the affected vehicles, more than twice as much as the new proposal, based on the administration's method of calculating savings. Passenger vehicles consume 40 percent of the oil we use, a whopping 8 million barrels each day, a figure that will balloon to nearly 12 million barrels a day by 2020. Pickups, SUVs and minivans covered by the proposal now comprise more than half of all U.S. passenger vehicle sales.

Jobs on the Line

Rising oil prices have placed a devastating and disproportionate burden on U.S. automakers, according to a report released last month by NRDC and the University of Michigan. Without serious action to improve fuel economy performance, Detroit automakers will continue to lose thousands of jobs and millions in earnings, leaving them at a sharp disadvantage to their Japanese competitors, the analysis found.

The report is available online by clicking here.

In addition to hot-selling hybrid drive systems, which can boost fuel economy 50 percent or more, the list of fuel-saving technologies available to automakers today includes improved engine and transmission designs, and high-strength chassis materials.

Responsibility for oil savings rests with the National Highway Traffic Safety Administration. By law, the agency must require "maximum feasible" performance. The final rule is due next April. The current standard is 21 mpg for 2005 and is scheduled to increase to 22.2 mpg by 2007.