Bush’s compromise on CAFE puts feds that much deeper in regulatory arena


The Bush administration last month caved in to years of pressure, and moved to make good on the president’s pledge to free the nation from its “addiction” to foreign oil, by making the most dramatic change in 30 years to Corporate Average Fuel Economy standards. Certain categories of trucks and SUVs will have to get better gas mileage in years to come.

But will the new mandates really do much to free the country from its hideous addiction, or reduce its dependency on fossil fuels? Probably not, if history is any guide.

Fuel economy standards imposed in the 1970s, after an earlier energy crunch, never succeeded in doing so. CAFE’s first round may even have aggravated our oil addiction, by helping to spawn the era of the SUV. And this round of efficiency mandates won’t put much more than a dent in the nation’s oil demand.

If we could achieve energy self-sufficiency by improving the efficiency of motor vehicles and other modern machines, we would have done it decades ago, since virtually every gadget we use, from our cars to our furnaces to our household appliances, are vastly more energy efficient today than they were in the past. Yet overall demand for energy continues to grow.

One of the “energy heresies” identified by Peter Huber and Mark Mills in their book, “The Bottomless Well,” is that gains in energy efficiency lower energy usage. “The more efficient our technologies, the more energy we consume,” the authors explain. “More efficient technology lets more people do more, and do it faster,” they write, and this “invariably swamps all the efficiency gains. New uses for more efficient technologies multiply faster than the old ones get improved.” Thus, “to curb energy consumption you have to lower efficiency, not raise it.”

The more efficient vehicles just ordered up by the federal government will go farther on less fuel, and cost less to operate per mile driven. That could well result in their owners driving them farther and using them more. And the number of these vehicles on the road will continue to increase as population and prosperity grows. So any marginal gains in efficiency that result from the new mandates will be nullified. And they won’t do away with the need to import oil or drill domestically.

Little will change, therefore, except that the costs of redesigning and re-engineering these vehicles to meet the new standard will be passed on to consumers, adding to the sticker shock associated with purchasing a new vehicle. That sticker shock, in turn, could prompt more Americans to buy used vehicles, extending the life cycles of older, less efficient machines and undermining the mandate’s purpose.

But such are the unintended consequences that occur whenever government meddles in matters it shouldn’t.
In addition, users of the new vehicles will be slightly less safe, statistically speaking, since lighter, more-fuel-efficient vehicles are less crashworthy than heavier, less-fuel-efficient ones. But that’s a trade-off rarely talked about by the advocates of CAFE standards, quite understandably.

The answer to that problem is simple enough for the reflex regulators, however; mandate more safety improvements. Those could add weight to vehicles, of course, reducing fuel efficiency. But not a problem; simply impose even stricter fuel economy standards.

It’s a vicious cycle … unless you’re a professional activist or a federal regulator. For them, it means job security.
All this might almost be worth it, in our view, if we thought the administration’s cave-in on CAFE would for even a few years silence the bleating of those who hold up CAFE as a panacea which negates the need to find, drill, pump, and refine oil. But the bleating will continue. The new standards weren’t even announced and the usual suspects were saying they aren’t strict enough, or being phased in quickly enough.

The Bush administration has compromised on CAFE, getting the federal government deeper into a regulatory arena where no government belongs. But does this mean environmentalists will also compromise, and concede the need to open more areas in Alaska and elsewhere to responsible oil exploration and extraction?

Don’t be fuelish.