Tuesday, April 06, 2010

EPA Policies: It's Like Driving a Car With One Foot on the Gas, and The Other Foot on the Brake

April 1 - Obama administration’s EPA issued final rules forcing automakers to increase their vehicles’ fuel economy by 40% in five years. By 2015, the new 35.5 mpg EPA mandate goes into effect.

April 2 - The very same EPA favorably reviewed an ethanol fuel mandate that would force autos to get up to 5 percent worse fuel economy. By 2015, oil companies are mandated by Congress to double the amount of corn ethanol use to 15 billion gallons. The current mandate of a 10 percent ethanol mix in fuel won’t get us there, so the powerful corn lobby is demanding EPA increase the mandate to a 15% ethanol mix. Trouble is, a gallon of ethanol is 30% less efficient than a gallon of gas meaning that the more ethanol you mix in, the worse your gas mileage.

So while automakers are sweating under the federal gun to make increasingly fuel-efficient engines, the government is mandating they do it with less-efficient fuel.

~Henry Payne in NRO

HT: Matt B.


At 4/07/2010 2:13 AM, Anonymous Anonymous said...

We should all be aware that the MPG standard is a side effect of Obama's CO2 standard. It's an end run around Congress, who gave DOT the right to regulate fuel efficiency, not EPA. In fact, that was part of the argument advanced by Ford in fighting EPA's CO2 mandate: that CO2 and mileage mandates are the same thing, and EPA doesn't have authority to regulate mileage.

EPA wants to mandate cars get better mileage. DOT wants to keep adding ever less marginally effective safety doodads and ever stricter safety tests to all cars, making them heavier and get worse mileage. I sense a disconnect here.

The reason ethanol was limited to 10% is that blends containing higher amounts of ethanol destroy gasoline engines. Moving to a 15% blend will cause thousands of engine failures.

At 4/07/2010 6:30 AM, Anonymous geoih said...

I think you're confusing scientific and logical thinking with political and bureaucratic thinking. This all makes perfect sense if you use the later. Anytime the state does anything, you must only consider the politics and bureaucracy to find the proper path.

At 4/07/2010 9:53 AM, Blogger W.E. Heasley said...

The posts above by randian and geoih are exactly correct.

Apparently the new gas milage mandate will cause the cost of a vehicle to increase by approximately $1,000. The counter argument to the price increase is that the $1,000 will be recovered by the increased gas mileage and hence cost savings in fuel will recover the $1,000.

However, the ethanol currently produced is done so with federal subsidies. Hence you not only get worse gas mileage with increased ethanol you do so at the direct cost to the tax payer.

The argument regarding recovering the $1,000 increase cost of a vehicle through better gas mileage has to be discounted by poorer gas mileage (more ethanol) than the argument is predicated upon. Then the argument must be further discounted by the subsidy to ethanol producers (the cost to tax payers).

The argument of cost recovery through better gas mileage then needs discounted again as ethanol production from corn increases the cost of food.

As pointed out in the above post, vehicles not set up for flex fuel will suffer engine damage due to a 15% mixture of ethanol. Hence we must discount the cost recovery argument of better fuel economy by the cost of shorter engine life and/or increased repair cost for the majority of the private passenger fleet not set up for flex fuel.

Further, future savings by no means guarantees current consumption. The increased cost of a vehicle by $1,000, that cost at the margin, will cause a group of marginal new car consumers to be priced out of the market. The future savings will be meaningless to the marginal consumer as he/she is then priced out of the market on a current basis. Therefore at the margin, the aim of the central planning authority of better gas mileage is never achieved due to marginal costs reducing purchases of the vehicle with greater fuel economy.

Surely a laundry lists of additional costs exist. Add your additional cost here ________ .

Obama and the EPA, economic geniuses extraordinaire!

At 4/07/2010 7:22 PM, Anonymous Anonymous said...

The rent seeking corn growing prostitutes are ruining our car's engines with their overpriced crap. Just another example of a foolish government intervention on behalf of vested interests at the expense of the public! When will this raping of the the public stop?

At 4/08/2010 6:38 AM, Anonymous geoih said...

Quote from Anonymous: "The rent seeking corn growing prostitutes are ruining our car's engines with their overpriced crap."

Why is it that contempt is always heaped on rent seekers, but never rent distributers (i.e., government)?

At 4/08/2010 7:28 AM, Anonymous Anonymous said...

Why is it that contempt is always heaped on rent seekers, but never rent distributers (i.e., government)?

You think I haven't displayed enough contempt?


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