Report Details Tense CAFE Talks, White House Punts on Ethanol Requirements
August 13, 2012 9:13 AM
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Reduced corn production makes increased ethanol content in fuel worrisome
A new report has been published that looks at the tense negotiations between the White House and automakers over CAFE standards that would push fuel efficiency to 54.5 mpg by 2025. According to the report put together by the House Oversight and Government Reform Committee, the Obama administration "openly played automakers off of each other to gain a tactical advantage over the industry."
"The inevitable product of this reckless process was a pair of rulemakings that reflect ideology over science and politics over process. … Americans will be forced to drive expensive, unpopular and unsafe automobiles mandated by the Obama administration," stated the report.
However, representative Elijah Cummings (D-Maryland), rejected the report stating, "Any allegations that the White House is seeking to weaken the auto industry are simply ridiculous — this is the White House that saved the auto industry from its near-collapse."
"Japan is angry. Feel like they have been screwed." -- Toyota
The report also features notes from auto manufacturers involved in the negotiation process with Washington. The notes show that foreign automakers particularly were unhappy with the process and felt that the rules were jilted in favor of Detroit automakers. Despite misgivings, most foreign automakers agreed to the deal. Handwritten notes in the report from Toyota stated, "Japan is angry. Feel like they have been screwed."
Automakers maintain that the
would add about $2,000 to the cost of the average vehicle by 2025 or roughly $3,000 when costs from the 2012 to 2013 fuel efficiency rules are figured in. Automakers felt pressure to agree to the Obama administration's fuel economy standards over fears that California would enact even stiffer efficiency ratings if they turned Washington down.
While fuel-efficiency standards are set to increase in the coming years, the White House is working hard to get more ethanol into the nation's fuel supply to help reduce the need for foreign oil. However, the U.S. is currently in the middle of a corn shortage. Ethanol in the U.S. is primarily produced using corn. Corn production in the U.S. has fallen drastically due to drought, and livestock producers fear that increasing the ethanol content in gasoline will result in even less corn being available feed, therefore, raising prices of feed and food supplies.
Severe drought conditions have obliterated this year's corn crop [Image Source: MSNBC]
The Detroit News
reports that over 180 members of Congress are calling on the Obama administration to waive increased ethanol requirements in fuel. White House spokesman Jay Carney said, "The EPA has made clear that they're working closely with the Department of Agriculture to keep an eye on yields, and they will evaluate all the relevant information when assessing that situation."
EPA spokeswoman Alisha Johnson said, "We are in close contact with USDA as they and we keep an eye on crop yield estimates, and we will review any data or information submitted by stakeholders, industry and states relating to the RFS program."
The Detroit News 
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RE: More exploitation and abuse of consumers
8/13/2012 12:53:33 PM
"without the CAFE standards looming over the industry, we would NEVER see this sort of thing...there has been a slow improvement in fuel economy over the past few decades, but it has taken CAFE to get the auto makers to make fuel economy a priority."
CAFE just restricts what types of cars consumers are allowed to buy. The cars offered by automakers reflect the preferences and priorities of the consumers. Car models that don't get cancelled quickly, as there are many makes and models competing for sales. Don't blame automakers for being slow, when they're just following what consumers want. Obviously, consumers don't prioritize super-high fuel efficiency to the same degree as the government, but instead prefer more space and some level of power and other amenities.
Also remember that it is the CAFE standards that killed the station wagon and pushed people into SUV's. The net result certainly wasn't less fuel usage, as the SUV's get worse mileage than a station wagon. It just wasn't practical to get a SW to meet the CAFE requirements that were enacted on cars, so people had to move to trucks to get the vehicle they wanted.
As far as the president "saving the auto industry", that seems laughable. At most, we spent 10's of billions to save GM. Other automakers were holding up fine. I doubt that the gov't subsidizing GM "saves" their competitors, though, who have to foot the bill for their debts and capital costs while GM's debt was reset to 0.
"It looks like the iPhone 4 might be their Vista, and I'm okay with that." -- Microsoft COO Kevin Turner
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