Close the CAFE Loophole

The ethanol bubble has been bursting a bit lately. I don't say that with glee, because I hate to see people lose money, especially when it was due largely to misleading claims. (I say that even though 95% of the hate mail I get comes from ethanol investors). I hope the end of the irrational exuberance we have seen in the ethanol market will lead to a more fact-based look at which technologies are needed to replace or supplement fossil fuels, and what technical challenges must be overcome before that happens.
There are certain things we can do to help ethanol along that I completely agree with. Because of the great potential, I think we need to heavily fund cellulosic ethanol research. I think we need to encourage the pursuit of closed-loop ethanol processes, like the one E3 Biofuels is building. I have no problem with making most vehicles flex-fuel. I do have a problem with requiring E85 pumps at some percentage of gas stations. We can't even produce enough ethanol to roll out E10 nationwide, so why force gas stations to put in a lot of E85 infrastructure when we can't possibly produce the E85 to justify the expense? I also have a problem with forcing oil companies to pay for the pumps. If ethanol producers insist on E85 pumps, they should be required to pay for their installation, since they are the ones who will primarily benefit from E85 sales.

While I support the production of more flex-fuel vehicles, the CAFE loophole for flex-fuel vehicles is appalling. The government regulates fuel efficiency in the U.S. with Corporate Average Fuel Efficiency, or CAFE standards. When the average fuel efficiency falls below a certain level for a car manufacturer, they must pay a penalty. This provides an incentive for auto makers to produce fuel-efficient vehicles.

However, there are a couple of loopholes that have limited the effectiveness of the standard. One is that light trucks have an exemption that allows them to get worse fuel efficiency without being penalized. Because SUVs are classified as light trucks, there is an incentive for the auto maker to produce SUVs. The good news is that the government recently passed legislation to close the loophole. The bad news is that it doesn't take place until 2011, meaning we have 5 more years of gas-guzzling SUV sales to contend with.

While this loophole is being closed, another is being opened. Did you wonder why automakers have embraced E85? Have they suddenly gone "green", and therefore E85 just seems like the right thing to do? No. By making flex-fuel vehicles, they are able to exploit another loophole in the standards. This loophole has recently been reported on in the press. Car and Driver was the first to bring this to my attention in Tech Stuff: Ethanol Promises. The article explains:

With fewer than 600 stations selling E85 fuel in 37 states, why have GM, Ford, and DaimlerChrysler been cranking out these flex-fuel vehicles by the millions?

The answer is the mandatory Corporate Average Fuel Economy (CAFE) standards. Federal law requires that the cars an automaker offers for sale average 27.5 mpg; light trucks must achieve 22.2 mpg. Failure to do so can result in substantial fines. However, relief is available to manufacturers that build E85 vehicles to encourage their production.

The irony here is that although E85 in fact gets poorer fuel economy than gasoline, for CAFE purposes, the government counts only the 15-percent gasoline content of E85. Not counting the ethanol, which is the other 85 percent, produces a seven-fold increase in E85 mpg. The official CAFE number for an E85 vehicle results from averaging the gas and the inflated E85 fuel-economy stats.

Consumer Reports recently weighed in with The Ethanol Myth. On the CAFE issue, they reported:

GM's advertising says, "Energy independence? The answer may be growing in our own backyard," and has coined the slogan "Live green, go yellow," referring to the corn from which most U.S. ethanol is made. DaimlerChrysler, Ford, and GM have said that they plan to double production of FFVs and other biofuel vehicles to 2 million by 2010.

The FFV surge is being motivated by generous fuel-economy credits that auto-makers get for every FFV they build, even if it never runs on E85. This allows them to pump out more gas-guzzling large SUVs and pickups, which is resulting in the consumption of many times more gallons of gasoline than E85 now replaces.

With the loophole in place, their motto should be "Live green, go yellow, consume more fossil fuels." By all means, build flex-fuel vehicles. But close this loophole, which may very well result in much higher gasoline consumption in the future.

Ethanol is a scam designed to keep the demand for oil high. It keeps the farmers buying more diesel, chemicals and fertilizer. The Bush/Cheney plan is completely criminal. We would be better off if the government didn't get involved at all.
Its more an example of short sighted thinking and politics trumping science than a scam to me - but it depends how you define it I guess.  Tha CAFE formula only counting the gasoline for the mileage instead of the lower mileage ethanol is amazing.
Why does this loophole exist? Is it because when the original law enabling the CAFE standards was written, alternative fuels were simply not on the horizon? Or is it "the best elected government money can buy" phenomenon in action? Judging from the 2011 date, there is some powerful backroom "sausage making" (two things you don't want to see made - sausage and law)

The Legislature as Sausage Factory: It's About Time We Examine This Metaphor

Why does this loophole exist?

My guess is "serious lobbying from the auto makers."

Judging from the 2011 date, there is some powerful backroom "sausage making" (two things you don't want to see made - sausage and law)

I think the 2011 date was part of Bush's contribution to "we are addicted to oil." But closing one loophole, he can claim to have done something about it, albeit long after he is out of office. But the FFV loophole will render closure of that loophole meaningless, since they will just start making all SUVs in the FFV variety, meaning they will get an even larger credit than they received with the previous loophole. Bottom line? With this loophole, overall CAFE standards can slide with no penalty.

There comes a time when gaming the system stops working.

<rant alert>

The industry can buy CAFE legislation and, to some extent, buy sales volume via no margin promotions. They can deploy deceptive selling practices like go green with corn!!!, and deceptive accounting practices like their treatment of health and pension liabilities or, as has been reported: finagling leases.

But they are only, to use an old expression, painting the turd white. They have lost control of their business. This loophole is not worth classifying as life support, Robert. These guys are toast.

> I think the 2011 date was part of Bush's contribution to "we
> are addicted to oil."

How much will the price of a SUV rise when this loophole is closed? Do you expect the average SUV-customer to care about it? They have the money ..

I think the average SUV driver is a middle-class soccer Mom. The penalties for not meeting CAFE are pretty steep, which is why the auto industry lobbies hard for a loophole. So, yeah, I expect the average SUV customer to care about it.
The question is, would the average SUV driver go for something just as "safe" (heavy) if the weight was something like lead-acid batteries?  That way, the "safety feature" could at least be displacing liquid motor fuell instead of sucking down more of it.
I think the whole safe thing is more a factor of size than weight.  It's also perception more than fact as many SUVs are not especially safe and don't score that well in crash tests.  Frankly, I don't think it matters what they think about "safety", when we're paying $5/gallon, no one is going to be driving a rolling brick, it doesn't matter how much they value their "safety".  
I think the whole safe thing is more a factor of size than weight.

Neither.  It's about engineering and construction.  See the scores for my 2006 Civic?

I think the whole safe thing is more a factor of size than weight.
Neither.  It's about engineering and construction.  See the scores for my 2006 Civic?

Actually, I think the IIHS ratings are based on vehicle size/class, so your Civic's "good" performance is relative to other small cars.  An interesting tidbit from the IIHS website:

Q: Why doesn't the Institute crash test the largest SUVs?

A: The forces in the Institute's 40 mph frontal offset test into a deformable barrier are similar to those in a real-world crash between two vehicles of the same weight, each going just less than 40 mph. So a test of a very large, heavy SUV would be equivalent to a real-world collision between two such vehicles -- an unlikely crash scenario because the heaviest SUVs represent such a small segment of the passenger vehicle market. Unless such SUVs were designed with very stiff front ends (a design that could exacerbate incompatibility problems in crashes with smaller, lighter passenger vehicles), their own mass would cause extensive deformation in the offset test. A similar degree of deformation would be unlikely to occur in a real-world frontal offset crash unless the other vehicle were equally large and heavy (or unless the SUV hit a bridge abutment, for example). For these reasons, the Institute doesn't plan to subject the heaviest SUVs to frontal offset crash tests into a deformable barrier.

I think the IIHS is assuming that because most other vehicles are smaller that large SUVs, the other vehicle would probably bear the brunt of the momentum change in a collision.  Too bad for the people in the smaller vehicle.

Does anyone know whether insurance companies take into account how much damage you're likely to do to the other vehicle (or people inside) when setting insurance rates?


Civic curb weight 2,593 lbs
Chevy Suburban 7200 lbs

In a head on collision, your civic will look like a crumpled up tin can.  The surburban may have some dented sheet metal

I will be floating in a sea of airbags.
Yeah but that doesn't mean the Suburban is safe.  Rather it is dangerous for the other person.  
yea, but in a head on collision between a suburban and a civic, would you rather be in the suburban or the civic?
But what if you had to avoid an 18 wheel truck? Which would yuo rather try to maneuver out of the way. Not all accidents are car to car and you may have more accidents in an SUV than you would in a less dangerous vehicle.
I'd far rather be in my civic in a tight spot requiring maneuvering.

Most of us think that S.U.V.s are much safer than sports cars.   If you asked the young parents of America whether they would rather strap their infant child in the back seat of the TrailBlazer or the passenger seat of the Boxster, they would choose the TrailBlazer.   We feel that way because in the TrailBlazer our chances of surviving a collision with a hypothetical tractor-trailer in the other lane are greater than they are in the Porsche.   What we forget, though, is that in the TrailBlazer you're also much more likely to hit the tractor-trailer because you can't get out of the way in time.   In the parlance of the automobile world, the TrailBlazer is better at "passive safety.  " The Boxster is better when it comes to "active safety," which is every bit as important.  

Consider the set of safety statistics compiled by Tom Wenzel, a scientist at Lawrence Berkeley National Laboratory, in California, and Marc Ross, a physicist at the University of Michigan.   The numbers are expressed in fatalities per million cars, both for drivers of particular models and for the drivers of the cars they hit.   (For example, in the first case, for every million Toyota Avalons on the road, forty Avalon drivers die in car accidents every year, and twenty people die in accidents involving Toyota Avalons.  ) The numbers below have been rounded:

Make/Model Type Driver
Deaths Other
Deaths Total
Toyota Avalon
 large 40 20 60
Chrysler Town & Country
 minivan 31 36 67
Toyota Camry
 mid-size 41 29 70
Volkswagen Jetta
 subcompact 47 23 70
Ford Windstar
 minivan 37 35 72
Nissan Maxima
 mid-size 53 26 79
Honda Accord
 mid-size 54 27 82
Chevrolet Venture
 minivan 51

Buick Century
 mid-size 70 23 93
Subaru Legacy/Outback
 74 24 98
Mazda 626
 compact 70 29 99
Chevrolet Malibu
 mid-size 71 34 105
Chevrolet Suburban
 S.U.V. 46 59 105
Jeep Grand Cherokee
 S.U.V. 61 44 106
Honda Civic
 subcompact 84 25 109
Toyota Corolla
 subcompact 81 29 110
Ford Expedition
 S.U.V. 55 57 112
GMC Jimmy
 S.U.V. 76 39 114
Ford Taurus
 mid-size 78 39 117
Nissan Altima
 compact 72 49 121
Mercury Marquis
 large 80 43 123
Nissan Sentra
 subcompact 95 34 129
Toyota 4Runner
 S.U.V. 94 43 137
Chevrolet Tahoe
 S.U.V. 68 74 141
Dodge Stratus
 mid-size 103 40 143
Lincoln Town Car
 large 100 47 147
Ford Explorer
 S.U.V. 88 60 148
Pontiac Grand Am
 compact 118 39 157
Toyota Tacoma
 pickup 111 59 171
Chevrolet Cavalier
 subcompact 146 41 186
Dodge Neon
 subcompact 161 39 199
Pontiac Sunfire
 subcompact 158 44 202
Ford F-Series
 pickup 110 128 238

Are the best performers the biggest and heaviest vehicles on the road? Not at all.   Among the safest cars are the midsize imports, like the Toyota Camry and the Honda Accord.   Or consider the extraordinary performance of some subcompacts, like the Volkswagen Jetta.   Drivers of the tiny Jetta die at a rate of just forty-seven per million, which is in the same range as drivers of the five-thousand-pound Chevrolet Suburban and almost half that of popular S.U.V. models like the Ford Explorer or the GMC Jimmy.   In a head-on crash, an Explorer or a Suburban would crush a Jetta or a Camry.   But, clearly, the drivers of Camrys and Jettas are finding a way to avoid head-on crashes with Explorers and Suburbans.   The benefits of being nimble--of being in an automobile that's capable of staying out of trouble--are in many cases greater than the benefits of being big.  

Tire selection and maintenance is an important augment for active safety.  There are some very good handling & braking tires out there.

All in all, my 1982 M-B 240D was about the safest (active & passive) car made when new.  Now, it is still among the better ones, despite no airbag.

I have been in a number of salvage yards, and seen dozens of crushed W123 M-Bs.  IMHO, the driver could have survived everyone with  minimal injuries if belted in.

BTW, I get 31 mpg in the city with my manual transmission.  This is the car IO chose to see me through Peak Oil.

I think the technology of safety belts has improved significantly since then (basically a bit of explosive that stops you hitting the dashboard or the wheel by locking the belt-- you may bruise your shoulder and break a few ribs, but you survive).  Don't have any cites, but this is my impression.

In addition, cars then didn't have rear shoulder belts, so an additional risk is present if you have passengers.

Also anti-lock (ABS) brakes were invented later on.  They make a big difference to collision avoidance, I believe.

Agree they were nice cars although if I can recall correctly they needed a lot of TLC (frequent oil changes etc.).

What I meant was the perception of the vehicle being safe was the size.  I said myself that it wasn't even actually true.  
Very true.

Chrysler actually found that by making the rear windows smaller they increased the feeling of safety of the car buyer.  So they made the windows smaller.

SUV drivers, riding above the flow of traffic, think they are safer.

Following a flash winter storm on the freeway to the Toronto airport, I once watched a (mum with kids) SUV driver power past me on the on ramp.  The road ahead was littered with fender benders-- 10 or 15 as far as the eye could see.  There was very little traction for stopping (ice with a thin layer of snow on top).

But her 4 wheel drive and heavy axle loading gave her the power to nose past me (I was in a Lincoln Town Car).  If she had to stop, she wouldn't have been able to.

The human brain will confuse traction accelerating with traction decelerating.  She would have been horrified if I told her she was guilty of unsafe driving, but she was.

True, it's a matter of size (fluffy is good) but rollovers are the bigger risk with top-heavy vehicles like SUV's.  The impression of weight as "safe" could easily be combined with an ultra-low CG from lead-acid ballast to create lots of real safety.

Of course, the biggest improvement would probably be to require all "light trucks" to have a maximum bumper height of 14" or so.

Rollovers and stopping distance.

Your stopping distance rises linearly (I think) with the weight of the vehicle.  Not sure of the friction equations (more than KE = 1/2 MV squared).

Also because an SUV is quieter, with less 'road feel', you tend to drive faster on average.  The surrounding environment isn't giving you the same warning signals about speed.

A third factor is crumple zones.  As Keith Bradsher points out in 'high and mighty' the original SUVs weren't built with the '3 box' crumple zones that sedans are-- the safety mandate is only '2 box'.

The result is in a head on collision the engine comes into the passenger compartment.

A fourth factor is I would bet (but don't know) that SUV (and pickup) drivers are less likely to wear seatbelts.  Again because of the feeling of safety (in the former) plus the 'young, male, western, independent' personality type in the latter.

If you are in a non head-on collision, your air bag is of limited utility.  Without the seat belt, you are toast.

Let everyone who doesn't wear a seatbelt see the beginning of the film 'Dead Calm' (with Sam Neil and Nicole Kidman).  I saw that film 20 years ago, and the scene still shakes me.

SUVs make the road more dangerous for other people, but not safer for their drivers.

Exactly, this would be part of the "first remove all regulatory biases and direct/indirect subsidies to fossil fuels." Then tax them directly or tax their carbon emissions.
Don't forget that large vehicles (above 6000 lbs gross vehicle weight) are completely exempt from almost all Federal fuel efficiency policy (CAFE standards, Gas Guzzler excise tax, luxury vehicle tax, large commercial vehicle accelerated depreciation, etc.).

Take a look at 26 USC 4001 for the luxury tax, 26 USC 4064 for the gas guzzler excise tax, 49 USC 32901 et seq. for the CAFE standards (including the subject exemption for E85), and 26 USC 280F for the accelerated commercial depreciation).

I think that this exemption is related in part to the large size of vehicles today.  Look at the vehicles over 6000 lbs:

Audi Q7 6294 lbs
Cadillac Escalade 7000 lbs
Chevy Suburban 7200 lbs
Chevy Tahoe 7100 lbs
Chrysler Aspen 6450 lbs
BMW X5 6008 lbs
Chevy Trailblazer SS 6001 lbs <-- nice use of limit!
Ford Explorer 6125 lbs

Well, you get the picture.  Everything in the "large SUV" category is well over the threshold, and many of the midsize SUVs are apparently a couple pounds over the threshold for some reason.  

You can't say with a straight face that these are not "passenger vehicles" by any reasonable definition.

I found this information for the least expensive model on

For each of these vehicles, the purchaser is exempt from all Federal regulations because it is not considered a "Passenger Vehicle".  For a Hummer H2, the exemptions can be worth over $10,000 in subsidies, if you're a "business" like a doctor or realtor, for example.

Most states do not require you to get a commercial driver's license until the vehicle exceeds 15,000 lbs.  I think that the definition of passenger vehicle should include all vehicles with more than three passenger seats up to 15,000 lbs.

Michael Perkins

I think these CAFE laws are quite bit of political bullshit. If the customers want to by large gas-guzzling cars they will find a way to get it from car manufacturers.

Why is the average car on Europe much more economic ?

Mileage is a real argument for car buyers here because gas is expensive because it is taxed quite heavily. I know this is politically impossible in the US, but the only thing would work.

Even in Europe politics play an important role. Diesel is cheaper because there is less tax. This because trucks use diesel and there is a truck lobby.



Diesel is also the subject of government policies to encourage sales of passenger diesels (which are more energy efficient).

You could say the lobbying has been by the makers of diesel engines-- certain emission controls are laxer than the US, so diesel engines can be used in passenger cars.

It has backfired, to some extent.  Diesel petrol is more expensive than petrol, because the refineries were built in the 70s for a different 'ideal' output mix, with more gasoline.

So at least in the UK, diesel fuel prices are a few pence higher than gas prices.

No. The US has "dirty" diesel, European diesel specifications are higher.
That's true on one dimension (sulphur content?) but I think the California EPA requirements include a particulates standard a diesel cannot meet?
Not now.

As of June 1, 2006, refineries have bto make 85% of their on-road diesel very low sulfur.  0.00l.5% 15% from memory.  This is the first step of several till 100% of all diesel, on & off road is very low sulfur.

The assumption in the supply chain is that all diesel at the pump will be very low sulfur by 1/1/7.  0.5% sulfur will be available for fleets without new 2007 emmissions controls and at "special" pumps for older trucks.

US Very low sulfur diesel = 0.015% sulphur (sorry for typo) AFAIK
26,000 lbs, not 15,000 is the cutoff for a CDL.

Why not drop the federal truck excise tax minimum weight from 32,000lbs to 6,000 lbs? Go with a CAFE vehicle or pay 12% tax.

My mistake, it is 26,000 lbs.  

I don't reasonably see how this loophole can be closed, politically speaking.  It seems like politicians on both sides have incentive to keep this one on the books, what with the Republicans continuing a "let the market decide" philosophy (ignoring the fact that these regulations are influencing the market greatly), and the Democrats being backed by unions in the industrial heartland who will scream that the American automakers will lose jobs (news flash:  American automakers are already losing jobs!)

Check this guy out, it's one pound short of the 26,000 lb limit:

Big Ass Truck


> Check this guy out, it's one pound short of the 26,000 lb
> limit:

Ideal car for the average soccer Mom .. she shouldn't be satisfied with less ..

I'm thinking about printing some bumper stickers to go around and slap on the back of monster trucks saying " My truck is big because my penis is tiny". Would this be considered ecoterrorism?
If it makes you feel any better I overheard two people talking about E85 and one person stated to the other that she would not buy E85 again because of the poor mileage she received while using it(ethanol). I had to chuckle..  
This CAFE ethanol loopholes is an excellent example of why those bastards in Washington that call themselves our representatives cannot be trusted with anything. This is what you get the instant you turn your back on them.

And we're supposed to think that there is a chance in hell these people will tackle the tough issues necessary to successfully reorder our entire infrastructure to cope with declining energy supplies?


Good point. Isn't the Federal Govt supposed to be on the side of the people? In other words they should be taking a stand against those who do bad things. Instead they are helping them. This goes not only for fuel economy but other aspects of fossil fuels such as coal use. When governments side with big biz against their own people some call it 'fascism'.
"Fascism should more properly be called corporatism, because it is the perfect merger of power between the corporation and the state." -- Benito Mussolini, dictator
Funny movie. The corporation explored as pathology.

The real damage of this time lost is still out in front of us, however.

As of now, I personally know people who are in the market for a new vehicle, and are "shopping down" in size and weight.  Many people have grown children, and no longer feel they need a large SUV, and are looking at enjoying a nice middle size sedan, some of which are very efficient in comparison to SUV's.

But, the SUV they trade in wll not disappear, will it?  Someone mentioned the middle class soccer moms.  A fair percentage of these people do not buy new SUV's, but shop in the one, two and three year old market.

If the ethanol CAFE loophole is allowed to prevail for even 3  years, it essentially rolls backward the improvement in fuel mileage of the total fleet on the highway, and means that the "turnover" to better total efficiency on the road is essentially a decade or more out in front of us.

The same is true by the way of housing.  The housing boom is supposedly dead, but even here in relatively poor KY, they are throwing up whole neighborhoods at an almost frantic pace.  The energy consumption of these houses will be "built in" for the better part of a half century.  It is possible to retrofit, but not easy, and the design of the home itself sets limits on efficiency.

The long and short of it is this:  We are building in the status quo for the next 20 years at this moment.  This is the whole point of the Hirsch report (s)

If we do not close the CAFE loopholes NOW, we will go after the oil in whatever way we must, because we will no choice.

Roger Conner  known to you as ThatsItImout

Roger, Right on the money.

Lack of legislation and codes is allowing poor fuel economy and energy inneficient houses onto the market.  These will not go away for decades.  

Even if people want to change consumption in the future there will be limits.  You can only retrofit so far to gain efficiency.  Return on investments is likely to be worse than building new energy efficient cars and houses.  

So the richest segment of people in the future will buy, new, the most fuel efficient lifestyle and the poor will buy the old stuff cheap and spend a fortune monthy on energy, if it is available.  We went through this in the 1970's and early 80's and then turned our backs on energy efficiency.  

Poor efficiency should be illegal the same way polluting is illegal.  We still pollute just not as much as we used to and there are monetary costs to subverting the system.  The same should happen for vehicles, HVAC sytems and appliances.  This lack of efficiency planning is going to bite us all soon when energy becomes intermittantly limited not just expensive.  

It won't matter how efficient you are personally if there is no supply because others are wasteful.

The point which you are alluding to is a good one.

When those SUVs are sold by their first owners, they don't disappear.  They become the cars of marginal car buyers: poor people, students, teenagers etc.

I would guess the average SUV only lives with its first owner for about 5 years.  After that, it will spend the next 10-12 years in the hands of a succession of buyers.

The people who buy them are the people who cannot afford the cost of a 2 year old Honda or Toyota upfront-- those cars have very low depreciation, and are expensive.

Working class people buy and drive the highly depreciated gas guzzlers-- the same thing happened with all the gas guzzlers Detroit was pumping out in the 70s.

There is an analogy in housing.  Poorer people rent, and buy, less well made housing with poorer insulation.  They then pay for that choice for the rest of their tenure there.  Same thing in the market for used appliances.

The good news is that miles driven per year declines a bit with the age of a vehicle.

I'm in a little of a hurry, but I think I learned that here

When the EPA, CARB, DOT, Big Ag, Auto, Oil and their lobbyists are in the same kitchen churning energy policy "sausage", do WE really have any chance? The CA AGs suit starts sounding reasonable.
BTW GM 6.6L turbodiesels arent "light-duty", cant somebody beside VW sell >2L TDs here.

Great job beating the drum on what really is an appalling scam at the heart of the US ethanol promotion policy. Regardless of other issues regarding the pros and cons of ethanol, the CAFE loopholes ensure it is bad environmental and energy policy.

I remain convinced that there are certain circumstances in which ethanol can contribute to replacing declining oil resources. However, I think the discussion should be transparent and ethanol should be forced to compete on equal footing with other renewables.

The irony here is that although E85 in fact gets poorer fuel economy than gasoline, for CAFE purposes, the government counts only the 15-percent gasoline content of E85. Not counting the ethanol, which is the other 85 percent, produces a seven-fold increase in E85 mpg. The official CAFE number for an E85 vehicle results from averaging the gas and the inflated E85 fuel-economy stats.

In the law, the amount of fuel efficiency increase due to "clean" fuels is capped, at 0.9 miles per gallon.  So the damage done by this policy is limited, a little.  The logic behind the policy, that the ethanol is "free" when it comes to calculating efficiency, could potentially lead to disastrous "reform" to increase the amount allowable.

From 49 USC 32906: "[T]he maximum increase in
average fuel economy for a manufacturer for each of the model years
2005-2008 attributable to dual fueled automobiles is .9 mile a gallon."

Write your Congressperson (assuming you're a US citizen) and demand to know why we allow automakers to take credit for "clean" fuels that aren't even a large fraction of the market (I think we get less than 10% of our liquid fuels from ethanol today?).  Shouldn't the formula include some correction for how much E85 is actually out there?


Actually US ethanol production for June averaged 318,000 brls/day or about 3.3% of gasoline consumption. This does not include diesel or aviation fuel, so ethanol supplies less than 2% of all US liquid fuels.  EIA data.
Great, so even if we assumed that fuel efficiency should be based only on direct fossil fuel, the calculation should be based on 97% gasoline efficiency, 3% E85 efficiency, rather than 50% for each.

Assume that a Chevy Tahoe gets around 18mpg overall on gasoline, and 14mpg overall on E85.  The overall CAFE efficiency should be, under current law:

18 * 0.5 + (14 / .15) * 0.5 = 55.6 mpg.

If we took into account the market shares for gas/E85:

18 * 0.97 + (14 /.15) * 0.03 = 20.3 mpg.

Much closer to reality.  It's still like polishing a turd, though.  Not to mention that for a Tahoe, GM doesn't care about CAFE since it's larger than 6000 lbs, and therefore is not a "passenger vehicle".


I'm worried that while investements in cellulosic ethanol research are certainly profitable for us as a society, the benefit comes almost entirely as a result of externalities. Patent protection is broken, as it's expensive, not really very powerful (because once one company figured out that V drug, it was easy for other companies to invent and patent closely related drugs, thus free-riding), and ethically questionable (monopolies on ideas? Come on).

I don't think ethanol research is very profitable for the investors themselves, so it's essentially underfunded, like so many other public goods in the world. The alternatives are

  1. Government funding. The traditional way of supplying public goods that would be hard to charge for otherwise. Ideologically difficult, especially in some parts of the world. Also, there's no point denying that there are problems related to finding the optimal focus areas that markets would be much better at, if they could only find a way.

  2. Charity. This is the best way the private sector has found for supplying public goods so far, it doesn't really solve the problem

Vinterman writes: "I don't think ethanol research is very profitable for the investors themselves, so it's essentially underfunded, like so many other public goods in the world."

This is a vast understatement.

Vinterman, Bill Clinton noted on the Daily Show in an interview with John Stewart that 1.2 billion dollars was raised for Tsunami relief with 30% of the people in Americaa donating, and 15% of them through the internet in $10-$20 increments, and the same could be done to get us off oil.
Politically impossible to change the rules eh? Too bad. The market will decide anyway...

if fuel is expensive enough, even a big fat subsidy won't make you buy a SUV instead of a Yaris.

Subsidies on SUVs phased out by 2011! That's completely surrealist! and irrelevant, to US car makers at least, because they will no longer exist by then. We're talking about people (GM) who believe that hydrogen fuel cells are the future of motoring!

For me, the real take home is that if Congress can't deal with something as straight forward as fuel efficiency standards, then it becomes improbable that they will deal appropriately with peak energy (and all the other peaks on the horizon).

Realistically, I anticipate an economic and environmental meltdown in the not too distant future.  The only thing that might possibly buy some time is a real estate collpase that results in a sever recession.

The real problem will be this.

Conventional oil production will peak.  Oil prices will soar, perhaps to $200/bl.  The economy will make major adjustments, just as it did in the 1970s-- but adjust it will (the nature of free market economies is that they are robust to big shocks as long as the banking system is preserved).

The alternatives (Coal to Oil, Tar Sands, Heavy Oil) are all big producers of CO2.  I think for tar sands something like 5 times as much CO2 per barrel as a conventional barrel of oil, by the time both are burnt.

The world is drowning in CO2-- atmospheric CO2 is already as high as it has been in the last 20 million years.  Geologic evidence suggests that the world climate is not fully stable.  It switches equilibria in very dramatic moves, sometimes running only over a few years.  The new equilibria are often outside those in which civilisation, if not human life itself, can survive (imagine a world where Africa and the Amazon are deserts, and the temperature of the Sahara is the temperature of London, and the sea levels are 10 metres higher).

At some point, we cross a point in atmospheric CO2 where the planet no longer acts to reduce CO2-- the biosystem is overwhelmed.  We don't know where that point is, but we are coming very close to it, at a best guess-- possibly within the next 100 years, possibly within the next 20.

In the case of the Permian extinction, permafrost methane was released (alternative: it was volcanic methane) and the planet heated up so much that 95%+ of animal life became extinct.  There is that amount of methane locked up in the permafrost, currently.,,1869133,00.html

Solving this problem is not beyond our technical means, (see George Monbiot's new book as a practical example), but it appears to be entirely beyond our political and institutional means.

There are widespread lobbying programmes run by major carbon polluters to spread doubt regarding the scientific consensus on global warming ('CO2 we call it life' ads etc.).  There are people who would literally rather die, than allow governments to tamper with the burning of coal and oil.,,1881023,00.html

If you read Jared Diamond, Collapse, one of the things he identifies in the failure of human societies is the failure of political/religious/social/governmental/business elites (depending on a society, these may be one and the same) to adapt their behaviour to changing environmental circumstances.,,9780143036555,00.html for a more succinct version of the same topic

is a quickie guide to the debate regarding the underlying mathematics (my own background is financial markets, and financial markets are a wonderful demonstration of this 'jump between equilibria').

Robert I agree with you but please try to contain the ensuing debate within the bounds of reason.

CAFE standard loopholes for SUVs as light trucks and other maligned legislation in support of SUVs (at the behest of lobbied interests) are far more encompassing and egregious than the loophole for FFVs - the latter not being an issue until the ethanol debate and the go yellow agenda really took off.

Furthermore, GM, Ford, and Chrysler are not cranking out flex fuel vehicles by the millions - that's misleading.

The point is, the standard loophole expires in 2011. How will the auto makers cope with this? Will they produce more fuel-efficient cars? No, they will just make flex fuel, and voila, they have another loophole. Surely you realize that they will start cranking them out by the millions in the future? Every SUV in the country will be flex-fuel, starting in 2011. Of course this won't do much, if anything, about our fossil fuel problem.
I see what you're saying but keep in mind that Detroit's mantra has always been that 'the consumer has a choice and it just so happens that he/she chooses the SUV which is why we build them'.

Tongue in cheek perhaps (considering the overall strategies and $ employed to endear drivers to these vehicles) but they're right just the same.  People do in fact hold the fate of the SUV in their very hands and as you've probably noted, sales of these types of vehicles have hit rock bottom - a trend likely to continue regardless of how many E85 Avalanches are made.

If GM is smart, they will bring this beauty to our shores:

More horsepower, more torque and greater fuel efficiency; there's even a bio-hybrid model on the way.  

Picture a young guy standing at the pump debating between ho-hum $3.00 gasoline or YE-HAH! $3.20 E85 with 30% more torque and horspower to impress his friends.

Which fuel do you think he'll choose?

The FFV future is ours to determine.

Clean diesel technology is one the "real deals" today, not corporate "drooling" US GM and ADM promote with current E85 here. Which is strange as in EU both companies are gung-ho diesel. (Although I believe E (and bioD) can/will evolve into a more economical products once co/trigen, yield, transport, marketing, tax and many other issues resolve.)
For example an 03 Saab 93 petrol gets 25-35mpg. Same car with a diesel gets 35-45. This drop-in mileage improvement is available today and city mileage can obviously be extended with even primitive hybrid teck.
We need all options on the table, not just the ones our nannies will give us.
Even to the extent of relaxing some emission controls.

It's a classic problem.  people worry much more about local emissions which they can see, and feel the damage of, than distant emissions.

When acid rain was first tackled, it was the super high smokestacks on power stations which were causing the big problem: moving the SO2 from being a local problem to a national and international one.  Those smokestacks were built to deal with local emissions control regulations.

Here in Europe, we are about 1/2 of new cars as diesels.  Hybrids are still much more expensive though than conventional cars.

One problem for GM and Ford is they don't have the cash flow to invest in building diesels for North American markets.  European diesels are (mostly) too small capacity to be useful.

US politics will revolve around the threatened bankruptcy of GM and Ford-- Michigan is a swing state, electorally.

Not around what is best for the country.

Do I have this right?... For each 0.1 MPG under the CAFE limit, auto manufacturers pay a $5.50 fine.  Did someone slip a decimal place in that?

A vehicle 5 MPG under the standard would cause $275 in fines.  That seems very small for a vehicle costing $30k.  In fact, a car that got 22.5 MPG instead of 27.5 MPG would cost ((15000/22.5) - (15000/27.5)) * 2.75 = $333 each year in additional gas costs--more each year than the single CAFE penalty.

I think that fine is spread across the entire fleet, but I don't know for sure if the $5.50 fine is correct. But I have read that some car makers, like some of the luxury car makers, just pay the fine.
The fine is spread across the fleet, but so is the fuel economy average.  So, if a company makes 10 vehicles but one of them has really bad mileage, the average is drawn down only by about 1/10 of the bad vehicle.  Thus 1/10 of the penalty is multiplied by 10 cars.  Note that the "average" is computed as gallons consumed assuming each vehicle travels the same distance;  this means that a bad vehicle will have a more-than-linear effect on the total fleet average... a 10 MPG vehicle and a 30 MPG have an "average" of 15 MPG, not 20 MPG.