The auto industry has a decades-long history of spreading mis-information about the costs of meeting stronger pollution and fuel efficiency standards. So it should come as no surprise that the auto industry is now claiming a 62 mpg standard by 2025 will lead to a loss of almost a quarter of a million auto jobs. To support their assertion, they cite the results of a recent U.S. Department of Energy (DOE) forecast. But a closer examination of the DOE forecast reveals the exact opposite conclusion: under 62 mpg standard, jobs in the vehicles manufacturing sector will increase—not decrease—by 280,000 from 2010 to 2025.

Auto Industry Claim: 62 mpg will lead to “loss of almost a quarter of a million jobs”

As reported in the Detroit News, the primary auto industry lobbying association, the Auto Alliance, sent a letter on May 11 to Secretary LaHood and Administrator Jackson claiming that a 62 mpg standard will lead to a “loss of almost a quarter of a million auto jobs.”

The basis of this assertion is an April 2011 forecast by a branch of the DOE, called the Energy Information Agency (EIA). The Auto Alliance letter claims the forecast shows that “setting a CAFE standard at the level of 62 mpg by 2025 would reduce sales by 14 percent.” The letter then simply asserts that “a 14 percent loss in jobs from today’s 1.7 million job base represents a loss of almost a quarter of a million auto jobs.” [Emphasis added. Note that the 1.7 million job estimate comes from this study for the Auto Alliance and includes auto makers, suppliers, and dealers.] 

Fact Check: DOE Study Actually Shows Job Increase of 290,000 with 62 mpg Standard

Fortunately, the DOE has put all their results online for public review here.   A close examination of the DOE forecast results reveals something far different than what the Auto Alliance claims:

• DOE estimates vehicle sales will increase from about 10.8 million units in 2010 to 14.8 million units by 2025, as the population grows and the economy recovers. This is a 37 percent sales increase between 2010 and 2025.
• DOE estimates between 2010 and 2025 jobs in the automobile manufacturing and other transportation equipment industries are forecast to increase by 280,000. This is a 21 percent increase in jobs between 2010 and 2025.

Error #1: Auto Industry Uses Wrong Base Year

The 14 percent “loss” in vehicle sales that the Auto Alliance cites is a comparison of two future 2025 cases. In the 62 mpg case, 2025 sales increase to 14.8 million units and increase to 17.2 million units in the case with no new standards (“Reference case”).

But the Auto Alliance claims there will be reduction in auto industry employment from “today’s” jobs levels. As stated above, the DOE study shows exactly the opposite, that with a 62 mpg standard by 2025, there will be more 21 percent more jobs and 37 percent more sales in the automobile manufacturing and other transportation equipment industries. 

Even if comparing the 2025 Reference case to the 62 mpg case, the estimate of the difference in employment in the automobile manufacturing and other transportation equipment industries is 1.5 percent. Given the assumptions that go into these models, there is essentially no difference in jobs between the two scenarios.

Error #2: Auto Industry Ignores Higher Standards Creates More Jobs Per Vehicle

The Auto Alliance simple formulation also ignores the job creation aspect of more technology content per vehicle. The DOE forecast shows  that there is essentially no difference between the 2010 to 2025 jobs growth for the 62 mpg case compared to the case with no new standards—21 percent versus 22 percent.  This is because the loss in sales in their analysis is offset by the higher value of the vehicles sold due to the greater technology content needed, such as batteries, turbochargers and lower rolling resistance tires.

UAW in a March testimony before the Congress recognized the job creation benefits of fuel-efficiency components:

DOE Study Overestimates Impact of 62 mpg on Auto Sales

Even this 14 percent sales difference is too high since DOE relies upon older estimates of the costs of new fuel-efficiency technologies. The DOE estimates the average cost for a new vehicle will go up by $4600 and requires 23 percent electric vehicle sales to meet the 62 mpg standard.

The best, most up-to-date analysis of fuel economy potential is by the U.S. Environmental Protection Agency, the U.S. Department of Transportation, and the California Air Resources Board. These agencies estimate the cost to meet a 62 mpg standard is between $2800 and $3500 and would require between 4 to 14 percent electric vehicle sales.

These newer, lower cost estimates will reduce, or even eliminate, any loss in vehicles sales. Indeed more recent analysis by the University of Michigan for Citi Investment Research suggests that reducing fuel consumption 6 percent per year would boost vehicle sales by 6 percent by 2020 since the fuel savings substantially outweigh the costs.

Previous Auto Industry Cost and Job Loss Claims Discredited

Former Ford president Lee Iacocca

The Auto Alliance appears to be switching gears from relying on a widely criticized study by the Center for Automotive Research (CAR)—an organization heavily sponsored by auto companies. Not surprisingly, the CAR study found a very high price tag, $6,435 per vehicle, to meet a 62 mpg standard that would lead to a 22 percent sales loss and 220,000 less auto sector jobs.

Unfortunately for the Auto Alliance, the independent International Council for Clean Transportation concluded in a strong critique that the CAR study had “so many fundamental technical and scientific errors” and it “cannot… serve as a basis for serious policy discussion.”

Again not surprisingly, the most recent auto industry claim is consistent with their statements over the past four decades:

• During a 1972 Congressional testimony, General Motors vice president Earnest Starkman declared that if automakers were forced to introduce catalytic converters on 1975 models, “It is conceivable that complete stoppage of the entire production could occur.”
• In 1972, Ford president Lee Iacocca claimed that if the U.S. Environmental Protection Agency does not suspend the catalytic converter rule, it will cause Ford to shut down and would result in: 1) reduction of gross national product by $17 billion; 2) increased unemployment of 800,000; and 3) decreased tax receipts of $5 billion at all levels of government so that some local governments would become insolvent.
• During a 1994 review of the California Air Resources Board’s Low Emission Vehicle program, the automakers estimated the cost of meeting key standards to be between $862 and $2,799. Actual costs? Between $120 and $336, depending on the emissions level.
• In 2007 under testimony in the Vermont trial of the California Clean Car Program, GM’s expert claimed that GM’s cost to meet California’s standard would be greater than $6,000 per vehicle, and they would have to completely stop selling cars and small trucks in states that had California’s standards.

Conclusion: Auto Industry Claims of Job Losses are False

A close examination of the DOE’s analysis leads one to the simple conclusion that the auto sector jobs will substantially increase from 2010 to 2025 with a 62 mpg standard.

The Obama administration begins finalizing new fuel efficiency and auto pollution standards this summer—in preparation for a decision in September.  It’s likely the auto industry will be filing new reports and studies that show how prohibitively expensive it will be to meet the new levels. For the sake of our energy security, economy and environment, let’s hope the auto industry puts aside the rhetoric and instead puts its engineers to work.

Roland Hwang is the Transportation Program Director for NRDC’s energy program, working on transportation energy and global warming issues at the state and national levels. Before coming to NRDC, Roland was the director of the Transportation Program for the Union of Concerned Scientists in the Berkeley office, having also worked on energy forecasting models at Lawrence Berkeley National Laboratory and as an air pollution engineer at the California Air Resources Board.

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During his most recent weekly address, President Obama stated that the U.S. can “out-innovate and out-compete” the rest of the world by investing in and adopting clean energy. The President can realize this vision and grow good jobs in the U.S. automotive industry by setting standards that reach 60 miles per gallon (mpg) by 2025. Around the world, nations concerned about oil dependence and carbon pollution are ramping up efforts to make cars and trucks more efficient. If our standards fall behind, so will our technology leadership.

We already know high and volatile gas prices can affect the domestic car business. When prices spiked in 2008, car buyers shunned large, gas-guzzling SUVs that were the foundation of the Detroit 3’s profits. Buyers instead flocked to foreign models, like fuel-efficient cars and crossovers, built to go further on a gallon of gasoline. It’s not surprising that foreign automakers had a stable of vehicles to meet consumer needs. For years, companies based outside the U.S. have been building vehicles that meet more stringent efficiency and pollution standards.

The graph below, produced by the International Council on Clean Transportation, demonstrates that the U.S. has been a laggard on standards. Asian and European car makers have consistently been subject to stronger requirements at home and have been first movers in efficient technologies such as hybrids and advanced diesels.

The U.S. is making some progress but it could be short-lived. Between now and 2016, the first phase of the National Program for clean cars requires vehicles sold in the U.S. to reach 34 mpg. The Obama Administration, working with the State of California, is now considering a second phase of the program out to 2025 with annual improvements ranging from 3% to 6%.

According to analysis by the U.S. Department of Transportation, Environmental Protection Agency and California Air Resources Board, a weak 3% trajectory can be achieved primarily through modest improvements to conventional vehicles. Hybrid-electric vehicles would not need to expand from the current 3% of annual sales.

Only the 6% scenario, reaching about 60 mpg in 2025, will keep the U.S. on-pace with proposed efficiency increases in the EU and China. And there are at least two reasons why this is important for U.S. competitiveness in the global car market.

First, a weak U.S. requirement can be a barrier to the export of U.S.-made vehicles to other regions. That’s a big missed opportunity. Both the EU and China have higher annual sales than the U.S. and China’s market will grow steadily as its economy continues to rapidly expand. These foreign markets, however, demand more efficient vehicles than those currently required in the U.S. market. Strong U.S. standards can spur U.S. production of efficient technologies to sell abroad.

Second, only a strong standard like 60 mpg will catalyze growth in the nascent U.S. plug-in electric vehicle industry. The timing couldn’t be more important. The Chinese, in particular, are charging forward to win the global race in plug-in vehicles. Under their New Energy Vehicle Development Plan, the Chinese government is investing $15 billion in its auto industry with a focus on electric vehicles. China plans to put 500,000 plug-in electric vehicles on its roads by 2015, and while this is half the current U.S. target of a 1 million vehicles by 2015, the Chinese also have a goal of 5 million vehicles by 2020.

A 6% per year, 60 mpg standard is critical to the U.S. auto industry competiveness since it is the only level that creates the regulatory certainty necessary to ensure that the U.S. auto industry maintains and grows its plug-in electric vehicle investments.

A 60-miles-per-gallon standard is the clear choice for keeping the U.S. globally competitive in clean energy. It’s the clear choice for U.S. jobs. (It’s also the clear choice for dealing with high gas prices and our oil dependence.) The Obama Administration should seize the opportunity to out-compete the rest of the world by setting clean car standards that reach 60 miles per gallon by 2025.

Luke Tonachel is a vehicle analyst at Natural Resources Defense Council. As an engineering officer on a Navy cruiser, he got hands-on experience with large propulsion plants and energy systems. After the navy, he joined a software company for a while but grew restless for a focus on environmental stewardship, returning to school to study environmental policy-making. Since joining NRDC in 2004, Luke has focused on the environmental impacts of mobility, working on ways to promote cleaner and more efficient car and truck technologies.

The post With 60 MPG, U.S. Automakers and Workers Can Lead World in Vehicle Manufacturing appeared first on HybridCars.com.

As an carmaker based in the “Axis of Evil” with no sales in the United States, IKCO doesn’t have to worry about meeting CAFE or any other standards. So why would a company based in a country where gas costs less than a 50 cents per gallon worry about fuel economy?

Because the Iranian government apparently views oil as too valuable to waste on the domestic market. Several years ago, Tehran began making moves toward transitioning its cars from petroleum to compressed natural gas—which is expected to remain cheap and abundant for most of this century.

In Saudi Arabia, renewable solar generation is poised to help remove petroleum as the kingdom’s leading source of energy within the coming decades. Last month, the Saudi government announced a $100 billion investment in nuclear and renewable energy, with the stated goal of increasing the amount of oil available for export.

“The use of alternative sustainable and reliable resources reduces dependency on hydrocarbons and keeps them as a source for income for future generations,” said Khalid Al Sulaiman of the King Abdullah City Center for Atomic and Renewable Energy, as reported by Forbes. “To [meet] growing energy demand and maintain long-term economic prosperity, it is critical that the Kingdom add new power generating capacity while reducing the amount of fossil fuels used to produce electricity.”

By 2030, the Saudis will attempt to replace 20 percent of their energy generation with renewables, making up the rest of the difference with nuclear power.

Saudi Arabia, Iran and IKCO all realize—and recent investments solar power and electric vehicle technology in other Middle Eastern countries confirm—that as world demand for gasoline increases, so too does the economic argument for selling oil to countries like the United States and China instead of giving it away at home for nickles on the dollar. Every gallon of gasoline the Saudis and Iranians save means one more gallon to sell on the world market—and more money in the coffers of their governments.

The post Oil-Rich Middle East Dictators Want…Oil Independence? appeared first on HybridCars.com.

The rebirth of GM’s mild hybrid technology coincides with rising gas prices, at a time when more mainstream consumers are looking to increase the fuel economy of their vehicles. In 2009, Chevy abruptly discontinued the original Malibu hybrid, which featured the much-maligned first-generation Belt Alternator Starter (BAS) system, an inexpensive but relatively ineffective fuel-saving system that failed to impress critics or consumers.

But as fuel costs approach the $4 mark for the first time since 2008, GM completed a round of extensive tweaking with mild hybrids, and is preparing to launch variants of both the Buick LaCrosse and Buick Regal featuring eAssist in the next year, followed by the Malibu Eco and other platforms soon. Automotive News reports this week that the Chevy Equinox and GMC Terrain are among several vehicles being considered for eAssist, quoting a top executive who said that GM has been convinced by recent buyer behavior that consumers will continue to flock to offerings with better fuel economy.

eAssist couples a regenerative breaking system featuring a 0.5-kWh lithium-ion battery and more powerful electric motor with a 4-cylinder gas engine and computer-controlled idle-start system. Though eAssist is still technically a Belt Alternator Starter, the increased energy storage capacity in the second-generation BAS system allows it to provide much more assistance to the gasoline engine—helping to create the impressive fuel economy gains seen in the Malibu and LaCrosse.

Will GM’s Mild Hybrid Redux Be Better Received?

Can the new wave of eAssist mild hybrids—which have been strategically branded to avoid any mention of the word “hybrid”—triumph where their predecessors failed? Early reviews of the LaCrosse are positive. At just a 10 percent price premium, the LaCrosse delivers nearly a 30 percent improvement in fuel economy—flipping the equation on the first generation of mild hybrids.

The improvements in efficiency and cost could put MPG numbers that were previously unattainable for many consumers—thanks to the higher price premium for similar mid-sized full hybrids—into play for the first time. “Not everyone can afford those. We know that,” GM North American president Mark Reuss said to Auto News. “The customer base finds cars like this very attractive because they pay for themselves.”

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But while “drill baby, drill,” continues to be a popular refrain for administration critics and some Democrats hailing from oil-producing states, the argument’s relevance to gas prices has recently come under greater scrutiny. A growing consensus of energy experts and analysts have lately come out against the idea that increasing the balance of domestically produced energy could yield significant relief to consumers struggling with high pump prices.

“This drill, drill, drill thing is tired,” said Tom Kloza, AAA’s chief oil analyst responsible for calculating gas prices, to CNN Money. “It’s a simplistic way of looking for a solution that doesn’t exist.”

As the CNN article points out—and as we’ve pointed out here several times in the past—the interconnected nature of global energy markets means that while any increase in oil production technically results downward pressure on world prices, the effect of increasing domestic production wouldn’t be so much to lower prices in the United States, but to lower prices everywhere—meaning that American consumers would feel only a small fraction of the theoretical relief.

But since OPEC and other major producers tend to tie export levels to price, the reaction to more American oil on the market would likely mean cuts in production in places like Saudi Arabia, Kuwait, and Venezuela. The net result? A barely-significant increase in the amount of oil available for purchase and little to no difference in the price of gas at the pump.

Then there’s the matter of how long it will actually take to get the currently off-limits oil. The EIA estimates that it would be ten years (after congressional approval) before the first barrel of oil produced at ANWR hits the market, and peak production from offshore sites would reach just 500,000 extra barrels per day by 2030. While that would be a relatively significant increase in daily U.S. production—which currently hovers slightly below 10 million barrels per day—the impact that those new offshore areas would have on U.S. gas prices would likely be just a few pennies per gallon.

For drivers hurting from expensive gas, the choice is clear: Either wait years for the political dust settle and domestic production to expand—all in the service of saving a few cents per gallon—or find a more fuel-efficient car that could cut your monthly fuel budget by 20 percent, 50 percent, or even higher.

The post Increasing Domestic Oil Production Would Have Little Effect on Gas Prices appeared first on HybridCars.com.

Since the emergence of hybrids in the last decade, several states have enacted similar carpool laws as an added incentive for consumers to embrace gas-electric vehicles. But with fuel prices high and hybrids no longer the newest fuel-saving technology on the block, the argument for keeping around added hybrid driver perks has weakened.

This June, California hybrid drivers will lose their HOV access—a bonus that has been available to 85,000 such vehicles since 2004. But with hybrids all but ubiquitous in many parts of the state, California decided last year to shift the privilege to drivers of plug-in electric vehicles, and push solo hybrid drivers out of HOV lanes. Virginia has long ranked among the top ten states for hybrid sales, which would likely make it among the first to end its HOV incentives—except that it isn’t.

Are Virginia Cops Hooked on Hybrids?

In order to be eligible for full HOV access, a Virginia hybrid must sport the state’s special Clean Fuel Vehicle (CFV) license plate, which is available for an additional $25 fee on top of the annual registration cost. Of that money, $15 goes to the state police’s “HOV Enforcement Fund,” which was established alongside the CFV law to help troopers identify and ticket HOV violators.

When Virginia first began granting solo hybrid HOV access, the state police issued a report (PDF) requesting a $300,000 annual enforcement budget—up from $140,000 the year before. Today, with more than 66,000 hybrids on Virginia roadways, the state income generated by CFV registration fees is adding up. Though information on exactly how many such tags are circulating isn’t readily available, if all 66,000 hybrids were to register each year, the state police budget could rake in more than $900,000 annually from the program.

Hybrid HOV drivers use tags to verify their access, rather than leaving it up to the police to spot the difference between a living passenger and say, an inflatable doll. It begs the question: Howt many additional enforcement dollars are required to keep them honest? But with state budgets tight, raising the additional funds necessary to neutralize the impact of losing that registration fee could be tough—which may explain why Virginia continues to kick the can down the road on the program.

For now, new hybrid owners in the commonwealth can continue to register their cars for CFV designation until June 30, 2011. All hybrids are scheduled to lose access exactly one year from that date—though given recent history, don’t be all that surprised if yet another extension finds its way into law before expiration hits.

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Last week, a bipartisan coalition of 133 House members signed on to co-sponsor the latest incarnation of the NAT GAS Act, which would provide credits for consumers, OEMs, fleet operators and filling station owners to encourage the adoption of compressed and liquified natural gas vehicles. The legislation was first introduced several years ago—thanks largely to the backing of energy magnate T. Boone Pickens—but had stagnated in congress until last week, when President Obama endorsed it as part of a major energy policy speech outlining White House proposals to cut annual oil imports by one-third within ten years.

With gasoline prices climbing ever closer to the $4 per gallon, momentum behind the newly updated bill is said to be growing in Washington. Pickens claimed recently that this time around, NAT GAS is a “no-brainer” to win congressional approval—predicting that it will pass with about 300 votes in the House of Representatives. The current bill is largely the same as its predecessors, though it would expire after just five years instead of 17, and create no mandates for public or private CNG adoption. The total cost of the bill hasn’t been released, but some proponents have placed it at about $1 billion per year.

Among NAT GAS’s provisions:

• Tax credits of up to $7,500 toward the purchase of consumer compressed natural gas and liquified natural gas vehicles, and as much as $64,000 for heavier grade commercial trucks.
• Up to $4,000 per vehicle for manufacturers of CNG and LNG vehicles.
• A $0.50 per gallon discount on the federal fuel tax.
• A 50 percent tax credit (maxing out at $100,000) toward the installation of CNG/LNG pumps at public and private filling stations.
• A $2,000 credit toward the installation of home refueling stations.

If NAT GAS were to win approval, it would constitute the first major victory for T. Boone Pickens and his Pickens Plan, which the billionaire began touting three years ago as a remedy for the nation’s foreign oil addiction. Pickens freely admits to being heavily invested in the gas and wind sectors promoted in his proposals, and his companies would be among the chief beneficiaries to any major market penetration by natural gas vehicles.

But Pickens isn’t alone in his enthusiasm for CNG. Honda has been quietly selling its Civic GX in California, Utah, Oklahoma and New York for six years—though that car is currently the only mass-market consumer natural gas vehicle available in the United States. Last year though, Honda announced that it will be expanding availability of the GX to all 50 states in 2012. Recently, word has spread that the car is being updated in anticipation of a more aggressive American market push, though Honda has offered modest sales projections for 2012—just 4,000 vehicles per year, or twice the current numbers.

Still, if the current version of NAT GAS becomes law and the federal government offers OEMs and consumers a combined $11,500 per vehicle to take a chance on CNG, Honda may need to adjust its forecasts.

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Automakers continue to introduce vehicles with many of the hybrid’s fuel saving features, but are backing away from using variations of the word “hybrid.” Most recently, General Motors announced eAssist technology, which will be incorporated into its Buick LaCrosse and Buick Regal. The technology enhancements include: a 0.5-kilowatt lithium ion battery that uses regenerative braking to provide a minimal amount of engine assist; a direct-injection engine; stop-start functionality; a six-speed automatic transmission; and chassis modifications to enhance aerodynamics. The end result of these additions to the LaCrosse are mpg ratings of 25 in the city and 37 on the highway—up from 23/30.

All of these features fit the definition of what we’ve come to know as mild hybrids, as Buick marketing executive Daryl Wilson agreed, but GM isn’t using those words to describe the vehicle. Instead, eAssist will be installed as a marketing term that will eventually spread to other vehicles. GM unsuccessfully tried to launch Saturn mild hybrids a few years ago with the Aura and Vue green lines. Perhaps consumers were expected Prius-like numbers of 50+ mpg, which are hard to achieve in a mild hybrid sedan. The Saturn hybrids, and then the entire lineup, were discontinued.

Similarly, Ford recently introduced PowerShift fuel-efficiency enhancements for the Focus and other vehicles that include direct-injection, a six-speed transmission, and more reliance on electricity instead of the engine when the vehicle is slowing or idling.

Ford, GM and the rest of the auto industry are adding these features to meet with international regulations for reducing carbon emissions and enhancing fuel-efficiency, but largely without the hybrid or stop-start branding. In Pike Research’s upcoming report on stop-start vehicles, we’ll detail how depending on the country, automakers are using names like Efficient Dynamics, ecoFlex, Pure Drive and BlueEfficiency to introduce these technologies.

Are these vague branding terms better or worse for prospective car buyers? Using the hybrid name became somewhat tangible in setting consumer expectations. However, many in the industry now believe that consumers don’t care about the technologies employed to make vehicles fuel efficient; they just want the results in C02 reductions and higher miles per gallon ratings. This strategy appears to be working in Europe and Asia, but for consumers who like to compare specifications, the task has become a bit more complicated.

John Gartner is a senior analyst at Hybrid Tech Expands to More Models, But The Name Is Fading Away appeared first on HybridCars.com.