Fuel efficiency of the fleet

Last Tuesday (19 May), President Obama released a plan for fuel-efficiency standards that would require U.S. car companies to improve their fleet mileage by 10 miles per gallon, to an average of 36.5 MPG by 2016. It’s a modest change; we ought to be able to effect a much greater improvement than that.

That said, it is, of course, a fine thing — assuming that legislators follow through with it and don’t relax it later, as they’ve often done in the past. Such improvements are good for the consumer, decreasing fuel costs. But let’s not fool ourselves into thinking that it’s all good. Making cars that use less fuel also pushes up the cost of the cars, and this is likely to cost more than the $1,300 per car that the plan includes. Further, modest increases aren’t necessarily good for the environment, because they might not adequately offset collateral environmentally unfriendly changes, such as the use of different materials and different manufacturing methods.

But also keep in mind that modest changes in miles per gallon do not save us, the consumers, as much as we think they will. That’s because we don’t drive our cars based on gallons, but based on miles. What matters isn’t how far we can go on a gallon of fuel, but how much it costs us to go where we need to.

Consider my commute, up through February: I used to drive 22.5 miles to work. 45 miles a day, 225 miles a week. If my car got 26.5 MPG, that would be 8.5 gallons a week. If gasoline was $2.50/gallon, it would cost me $21.25 to get to work and back for a week.

Re-compute that with 36.5 MPG: 6.16 gallons, $15.40. I’d save $5.85 a week, or $300 a year, on my work commute. Computing the cost of driving 15,000 miles a year both ways yield’s a saving of a little less than $400 a year.

Note that the companies are saying that effecting the required increase in fleet economy would “add a few thousand dollars” to the cost of a car, according to one estimate. Let’s take “a few thousand” to mean, oh, say, $4,000. That would mean that at a gas price of $2.50/gallon (about what it is in my area right now), someone driving 15,000 miles a year would have to keep a car for at least ten years in order to break even on the cost.

How many of us keep cars for ten years? I do; I had my previous car for 13 years (248,000 miles), and my current car turns 10 this year (about 175,000 miles now). Most people, though, do not. Most people will not save money with this change, unless fuel prices increase significantly — which they certainly could do. If the added cost is only $3,000 and gas costs $3.50/gallon, the break-even point is 5.5 years. Many people will still replace their cars before they break even on this change, but a good number of us will benefit.

Note that I’m not saying that the change isn’t good — it might well be, and it’s certainly a start. What I’m saying is that it’s not as straightforward as it sounds.

Partisan “experts”

NPR’s Morning Edition had an item on Wednesday about the major-party candidates’ energy plans. They talked with a professor from MIT:

Expert Assesses Candidates’ Energy Plans

Morning Edition, July 16, 2008 — Presumptive Democratic presidential nominee Barack Obama and his Republican challenger John McCain have proposals for dealing with the tight supply of oil. Steve Inskeep talks with Bob Pindyck, a professor of economics and finance at MIT, about whether the candidates’ energy plans would make a difference as Americans face rising energy costs.

An economics professor, talking about energy? They don’t make clear why he’s an “expert” in this field, but, still, I eagerly listened to Professor Pindyck’s analysis of the two candidates’ plans.

He likes an idea that John McCain supports, of removing the tariff on Brazilian ethanol (made from sugar cane) for adding to gasoline, to provide a cheaper alternative to making our own ethanol from corn. Barack Obama opposes that idea, and Prof. Pindyck figures it’s political pressure from middle-America corn farmers, looking to keep the price of corn high, that’s the reason for his opposition.

I’m not convinced. I see, now, where his expertise is: he’s looking at it from an economics point of view, which is, after all, one of the primary issues right now — the price of fuel. But he’s just speculating on Senator Obama’s reasons for opposition; he says, “I think that, politically, it’s hard”. Has he considered other reasons? Does he have any statements from Barack Obama about this?

When asked directly about his opinions on Senator Obama’s plans, Professor Pindyck begins, “You know, it’s all very vague.” Oh, that’s not good; vague is not good. Tell me more about that. Prof. Pindyck does:

He talks about providing subsidies to renewable energy sources such as wind and solar, and it’s not clear what those subsidies would look like, where they would go. And in addition, it’s not going to have a large impact, and any impact it has is many years away. So that’s the big problem with that.

Hm. Subsidizing the development of renewable energy sources doesn’t sound vague at all. And it sounds to me like a fine start. But you know what does sound vague? The statement that “it’s not going to have a large impact.” Any more detail on that, Professor? Anything to back it up?

Well, Steve Inskeep does press him on that point:

NPR: What do you mean, "not going to have a large impact"? Because we were talking the other day to a guy who’s investing in wind farms, and he’s saying there’s enough wind in the Dakotas to run the entire United States.

Pindyck: Well, that’s a nice assertion. I’m not sure that’s true, though. Look, wind energy to produce electricity is something that’s going to be part of our energy mix in the future. It’s not going to produce all our electricity; it’ll produce something. It has its own environmental issues. As you might know, there are proposals to build wind farms off the coast of Massachusetts. There are a lot of groups that oppose that, because they think it won’t look nice, it’ll destroy the view.

I’ll note that he hasn’t answered the “large impact” question, but has just focused on one aspect of using wind power. Perhaps that’s because he’s not an expert on renewable energy sources, energy production, or environmental issues. So his contention is that subsidies to developers of wind power will not have a large impact because wind power will “produce something”, but, he implies, not much. It’s a nice assertion, but, again, he doesn’t support his statement.

He then goes on to talk about increased use of nuclear energy — which John McCain supports, and Barack Obama does not. Are we seeing a pattern, here?

I have to include one more quote from the Professor:

There are very few ways you can produce electricity without using fossil fuels, and nuclear is one of them.

Well, yes, that’s true — and, in fact, I, too, think we have to continue using nuclear power as we work on developing other sources. But he completely dismisses the other renewable energy sources. There are a few ways you can produce electricity without using fossil fuels, and wind, water, and solar generation are some of them. It’s OK to tell us that research and development in those areas is not practical, but you have to back such a statement up. Otherwise, you’re just being vague.

What a misdirected, misdescribed article! There’s nothing wrong with having this guy on the radio and hearing what he has to say. But don’t bill him as an “expert” who’s making an “assessment” of the two sides. Here, let me rewrite the headline and the lede:

McCain Supporter Opines On Candidates’ Energy Plans

Presumptive Democratic presidential nominee Barack Obama and his Republican challenger John McCain have proposals for dealing with the tight supply of oil. Steve Inskeep talks with Bob Pindyck, a supporter of John McCain, about what he thinks of the candidates’ energy plans as Americans face rising energy costs.

There. That’s better.