Under the Energy Independence and Security Act passed last year, the Department of Transportation (DOT) has to raise the fuel economy standard for cars and light trucks to a fleet-wide average of 35 miles per gallon by 2020. The act also gives the DOT the authority to fix interim standards. The government’s recent proposal to increase fuel efficiency of automobiles to 31.5 miles per gallon by 2015 has drawn criticism from all quarters. Auto makers say it is too tough on them. Activists say it is not tough enough.

This recent proposal is a 25% increase from the present standards and does a great disservice to the auto industry and the American people. The auto industry is in absolute crisis scrambling to adjust to the market shift that has occurred due to rapidly rising gas prices, with consumers fleeing from large, fuel-inefficient light trucks and SUVs and buying smaller, more fuel-efficient and hybrid electric cars.

U.S. auto makers say that while the proposal is expected to save car owners more than $100 billion in fuel costs over the lifetime of the vehicle, it would cost the industry over $46 billion to implement the proposal making it the most expensive federal proposal ever. They warn that many of them would be forced to close shop or cut down on the number of workers – both of which are not good for the economy. This year is turning out to be the worst year for car sales in more than a decade. News of the troubled auto industry keeps mounting. Ford Motor Company just announced a loss of $8.7 billion for the second quarter.

U.S. automakers contend that the act puts them at a disadvantage to foreign car makers who are used to higher gasoline prices and much stricter regulations. It’s not nearly as hard for them to meet the 35 mpg average as it is for the American companies.

Activists point out that the new fuel economy standards are for all the vehicles that one manufacturer produces combined and not every vehicle has to meet them. The act assumes retail gas prices of $2.31 per gallon for model year 2015, with a high estimate of $3.19. For 2030, the assumed price is $2.51 per gallon, and the high price is $3.76. This is totally incorrect. Prices are already well over $4 a gallon.

The 35 miles per gallon target is well below what is technologically feasible. The national Highway Traffic Safety Administration’s own analysis shows that automakers could achieve a fleet-wide fuel economy standard of 37 miles per gallon by the year 2015.

The proposed fuel economy standards that are unreasonably low cover a period that is unreasonably long and are inadequately documented, meeting neither the spirit nor the intent of the Energy Independence and Security Act.

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