Monday, January 29, 2007

Read the Fine Print

by Tom Bozzo

Here's a minor addendum to Paul Krugman's "The Sum of All Ears" (non-Times Select excerpt at Economist's View). One road to perdition is that on which hulking SUVs run on E85 (85% ethanol, 15% gasoline blend) fuel in the name of greenness. When gas prices peaked last year, there were a few stories to the effect that the (subsidized) lower pump price of E85 was largely offset by increased fuel consumption owing to ethanol's lower energy density.

GM is helpfully, if in small print, showing the fuel economy of its flex-fuelable large SUVs on both gasoline and E85. The headline EPA mileage ratings for the flex-fuel GMC Yukon 4x4 SUV are 15 MPG city, 21 highway, which is bad but not terrible by the standards of large truck-based SUVs. However, a footnote indicates that the same vehicle gets a truly terrible 11 city/15 highway on E85. Given the biomass limitations of ethanol production under current methods, we could get in Big Trouble if people all thought they could burnish their green credentials while driving big trucks.

Now, the WPE admittedly did mention increasing fuel economy standards to get part of the way to reducing oil consumption -- the assumption is that passenger car standards would increase by about 7-8 MPG between 2010-2017, while truck standards would rise by 4-5 MPG between 2012-2017. While this appears to be a step in the right direction, this being the Bush administration, there must be a catch somewhere. And it turns out to be in a proposal to extend "attribute-based" standards from trucks to cars.

On the truck side, which we visited in 2005, this amouts to size-based categories that have the effect of raising standards a lot on small trucks (which are already relatively fuel efficient), less on midsize trucks, and not at all on larger vehicles. The effect is to get a rise in the overall standard while requiring relatively little improvement for any particular trucks. The initial proposal would have expanded the loopholes under which cars can be reclassified as trucks for fuel economy purposes, and would have created new incentives to re-engineer smaller vehicles to fall under the midsize truck standard. Mission accomplished!

Clearly, an attribute-based standard can easily do the same for cars, giving already-efficient subcompacts a higher-than-average standard (say, 44 MPG, vs. the 34-35 overall) while large sedans may see little increase or even a reduction in the applicable standard.

The proposal to create a separate set of attribute-based standards for cars actually begs the question of why you'd have separate car and truck standards in such a world. In effect, differences in the attribute mix of cars vs. trucks was part of the reason for separating them in the first place. With those attributes explicitly reflected in the standards, the effect is to give trucks a break (relative to cars) for their aerodynamical challenges.

Another significant issue is whether cars and trucks would be able to meet fuel economy standards using their performance on gasoline while subsidies and marketing efforts promote their operation at much lower fuel economy using high-ethanol-content fuel blends. This bait-and-switch would increase the farm-state pork content of the proposal.

Krugman snarks a bit about Cheney's disdain for energy conservation, and one thing I noticed was a funny expression on Cheney's face during the alternative energy part of the speech:
Picture 1

At that moment, Bush was describing the prospect for reductions in oil imports. While the picture might be worth a few hundred words, in all fairness Cheney might have been smirking in reaction to the orgasmic response that was pending from one member of the Republican Senate minority:
Picture 2

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