NHTSA Releases Final EIS on New Fuel Economy Rules With Alternative Scenarios; Most Aggressive Reaches 42 MPG by 2015

Jose Michael

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The NHTSA FEIS concludes that the most extreme technology scenarios combined with higher economic inputs could deliver or beat the 2020 CAFE target by 2015. Click to enlarge.

The National Highway Traffic Safety Administration (NHTSA) has released the final environmental impact statement (FEIS) on the new CAFE rules for light-duty vehicles from model years 2011 to 2015. This period represents the first stage of a series of CAFE increases that are to result in a minimum new vehicle fleet average of 35 mpg by 2020.

Under Council on Environmental Quality (CEQ) National Environmental Policy Act (NEPA) regulations, NHTSA must compare the potential environmental impacts of its proposed action and a reasonable range of alternatives. In fulfillment of this requirement, NHTSA analyzed the impacts of six “action” alternatives and the impacts that would be expected if NHTSA imposed no new requirements (the No Action Alternative).

In April, NHTSA issued a Notice of Proposed Rulemaking for new vehicle fuel economy standards that would bring the US average to about 31.6 miles per gallon in 2015 (35.7 mpg cars, 28.6 mpg trucks). (Earlier post.) Under the Energy Independence and Security Act of 2007 (EISA), NHTSA, the agency that “owns” fuel economy regulations, can establish standards for a maximum of five model years at one time. Hence, the initial proposed rulemaking covers model years 2011-2015.

In response to criticisms of the draft EIS released earlier this year (which also worked with the seven alternatives), the FEIS examines how the alternatives are affected by variations in the economic assumptions input to the computer model NHTSA uses to calculate the costs and benefits of various CAFE standards (the Volpe model)—e.g., a higher fuel price ($3.33/gallon in the high scenario, compared to $2.41 in the reference case), and a higher global price on carbon of $33 per tonne.

The alternatives, run with both reference case and higher input scenarios, in order of increasing stringency, are:

  • No action. The No Action Alternative assumes that average fuel economy levels in the absence of CAFE standards beyond 2010 would equal the higher of a manufacturer’s product plans or the manufacturer’s required level of average fuel economy for MY 2010.

  • 25% below optimized. Combined industry-wide average fuel economy for all passenger cars and light trucks would range from 29.4 mpg for the Reference Case to 32.9 for the High Scenario.

  • Optimized: NHTSA’s preferred alternative, this is the level at which marginal costs equal marginal benefits. In MY 2015, the combined industry-wide average fuel economy for all passenger cars and light trucks would range from 29.6 mpg for the Reference Case to 33.6 for the High Scenario.

  • 25% above optimized. In MY 2015, the combined industry-wide average fuel economy for all passenger cars and light trucks would range from 29.8 mpg for the Reference Case to 34.2 for the High Scenario.

  • 50% above optimized. In MY 2015, the combined industry-wide average fuel economy for all passenger cars and light trucks would range from 30.0 mpg for the Reference Case to 34.8 for the High Scenario.

  • Total costs equals total benefits. This alternative requires manufacturers to apply technologies until total costs equal total benefits, yielding zero net benefits. In MY 2015, the combined industry-wide average fuel economy for all passenger cars and light trucks would range from 30.4 mpg for the Reference Case to 36.0 for the High Scenario.

  • Technology exhaustion. The most stringent, this alternative represents the level at which vehicle manufacturers apply all feasible technologies, while recognizing that some must still be installed as part of a vehicle freshening or redesign. Alternative 7 would yield negative net benefits, according to NHTSA’s analysis.

    NHTSA developed the Technology Exhaustion Alternative by progressively increasing the stringency of the standard in each model year until every manufacturer (among those without a history of paying civil penalties) exhausted technologies estimated to be available during MY 2011-2015. The combined industry-wide average fuel economy for all passenger cars and light trucks would be 42.0 mpg in MY 2015 under all input scenarios.

Thirty days after the EPA publishes a notice of availability of this FEIS in the Federal Register, NHTSA will publish a final CAFE rule.

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