The EPA's Odd View On Consumer Choice

From The CATO Institute:

The EPA's Odd View of 'Consumer Choice'


by Patrick J. Michaels





Patrick J. Michaels is senior fellow in environmental studies at the Cato Institute and author of Climate of Extremes: Global Warming Science They Don't Want You to Know. He formerly served as state climatologist for Virginia and is a former professor at the University of Virginia.

Added to cato.org on October 18, 2010



This article appeared in The Richmond Times-Dispatch on October 17, 2010.



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ShareThisEarlier this month, the Environmental Protection Agency proposed in a "Notice of Intent" that passenger vehicle fuel economy average as much as 62 miles per gallon 14 years from now. The agency was able to arrive at this lofty mark by conveniently ignoring everything we know about the state of automotive art and the marketplace today.



For one thing, the average passenger car is going to have to get a lot more than 62 mpg to meet EPA's standard. People are still going to need trucks, vans, and high-volume vehicles that will fall far short of the 62-mpg standard. As a result, what is today's Honda Civic or Ford Fusion is somehow going to have to crank out about 80 miles per gallon.



Today, the vaunted hybrid versions of those cars generally deliver 35-40 mpg if driven with a very light touch. ("Your mileage will vary.")



The current mileage champion, at 50 mpg, is the third-generation Toyota Prius. But don't look for that design to meet EPA's prospective standard; it's just too heavy to squeeze much more juice out of the gas.



Despite the relative success of Toyota's Prius, the fact is that people just aren't flocking to hybrid vehicles.

To bolster its 62-mpg proposal, EPA produced a numbing 245-page analysis of prospective automotive technologies — many of which don't exist, the rest of which have been rejected by consumers. The report doesn't mandate any one technology, but instead offers a myriad of pipe-dream possibilities.



Why aren't these technologies widely available now? Excellent question — especially because this isn't the government's first attempt to command the 80-mpg passenger car.



In 1993, the Clinton administration grandiosely announced the "Program for a New Generation of Vehicles" (PNGV), which showered the then-Big Three with about a billion bucks to produce a fuel-sipper. It never appeared.



The technological solutions proposed then really aren't very different from what we see now. Cost and acceptability were the two factors that condemned the PNGV to failure, and things haven't changed enough to expect a different result today.



A non-participant in PNGV, Honda, decided to throw every fuel-saving technology it could muster into one platform. It hit 66 mpg with the 2000 Insight, a frameless 1,850-pound aluminum vehicle that seats two.



Consumer demand? An average of 2,250 sold annually in the six years it was offered.



Despite the relative success of Toyota's Prius, the fact is that people just aren't flocking to hybrid vehicles. Their lack of appeal mainly has to do with price; people just don't want to pony up an additional cost that may take more than 10 years to recoup at the gas pump.



Despite this history, EPA thinks there will be a massive shift to subcompact cars in the next six ears. Instead of the Accord, you get the Fit. Camrys turn into Yarises. Consumer preferences magically change.



Indeed.



EPA forecasts that despite their current unpopularity, hybrid sales will grow by orders of magnitude. Especially large numbers of Honda-style hybrids are predicted to be purchased (despite the fact that hybrid customers clearly prefer the heavier Toyota and Ford versions).



Sales of "plug-in" hybrids also supposedly will take off. These are vehicles that can run on battery power alone for 20-40 miles, and then (as in the new Chevrolet Volt) a gas engine kicks in as a generator. EPA is also counting on pure electric vehicles, with a range of up to 100 miles before they must be charged — a process that takes hours at special charging stations on the street or overnight at home.



Drive the Chevy Volt more than 30 or so miles and it will be powered by a generator — not a motor — inefficiently powering a 3,500-pound car. No one knows the true fuel economy, but it's not even likely to beat the Prius in real-world driving. That leaves us a long way from 80 mpg.



Patrick J. Michaels is senior fellow in environmental studies at the Cato Institute and author of Climate of Extremes: Global Warming Science They Don't Want You to Know. He formerly served as state climatologist for Virginia and is a former professor at the University of Virginia.



More by Patrick J. Michaels(The above information about the Volt was what I was told by a GM engineer at the Detroit auto show last January, while sitting in the very car. GM revealed on Oct. 10 that the internal combustion engine indeed will drive the wheels at high speed. This is no breakthrough automobile; on the freeway it is a conventional hybrid. )



Then there's the heavily subsidized, all-electric Nissan Leaf. The company's president, Carlos Ghosn, says he will be happy to produce them as long as Uncle Sam guarantees him a profit on a vehicle that simply can't stand on its own four wheels. The electricity that charges it probably comes from the combustion of fossil fuels, which emit greenhouse gases. Calculating the actual mpg of this car is therefore complicated at best.



So far as one can tell from EPA's 62-mpg proposal, the agency thinks that in a mere 14 years Americans will buy hybrids that they can't stand, subcompacts that families hate, an electric car that can only run 30 miles before it likely becomes more inefficient than its conventional counterpart, and a 100-mile electric car that requires hours of charging once it runs out of juice.