A Well-Intentioned (?) Foolishness

I see that a group of retired military officers and big energy users are calling for steadily increasing CAFE regulations to solve our energy dependence on foreign sources. As readers of my blog know, I feel strongly that this approach is inadequate. Raising CAFE will not per se change consumer behavior. It will take parallel increases in fuel taxes to do so. Perhaps it is not too surprising that this group does not advocate such an approach, given that its non-military members are all large consumers of fuel or petroleum-based feedstocks.

For more on the Energy Security Leadership Council, go to their web site:

http://www.secureenergy.org/energycouncil_about.php

Group seeks tough fuel efficiency standards

Foreign oil called threat to security

BY JUSTIN HYDE
FREE PRESS WASHINGTON STAFF

December 14, 2006

WASHINGTON -- A group of corporate chief executives and retired military generals called Wednesday for the federal government to raise fuel economy standards by 4% a year and take other steps toward cutting U.S. oil imports almost in half from today's levels by 2030.

The push from the Energy Security Leadership Council adds to a growing movement in Washington for toughening fuel-efficiency standards for vehicles, especially the 27.5 miles per gallon standard for passenger cars set by Congress in 1975. Industry executives say the debate around Capitol Hill has shifted from whether an increase is necessary to what form it will take when Congress convenes next year.

The council includes the chief executives of FedEx, UPS and Dow Chemical and top executives from Southwest Airlines and Goldman Sachs, along with several retired U.S. military commanders. They contend U.S. reliance on foreign sources of energy gives adversaries in parts of the world too much leverage over the U.S. economy.

"We're now far more vulnerable than we were in the '70s," said Robert Hormats, vice chairman of Goldman Sachs' international unit. "The disruption that could occur ... could be extremely serious."

Their main proposal would require federal regulators to reform standards for cars as they did for trucks last year, setting a goal based on a vehicle's size rather than a single number for the entire fleet. Regulators would assume 4% annual increases but could delay those if they found the industry couldn't meet them.

The group also proposed fuel-efficiency standards for heavy-duty trucks, as well as more incentives for alternatives to oil such as ethanol. They estimate their proposals would save just under half of the U.S. daily consumption.

While the auto industry has opposed increases in fuel economy standards for years, a number of executives and lawmakers say the change of power in Congress and growing concern about American dependence on foreign oil make an increase likely.

Automakers have not opposed a proposal by the Bush administration to let federal regulators set new standards for passenger cars, but most, including the Alliance for Automobile Manufacturers, object to an automated increase, saying only the National Highway Traffic Safety Administration has the expertise to raise standards.

"We believe that technology remains the successful formula for progress toward reducing our dependence on foreign oil," said GM spokesman Greg Martin.