CAFE (Corporate Average Fuel Economy)

CAFE (Corporate Average Fuel Economy): Flexible Classification of Passenger Vehicles will Serve Up Greater Portions of Increased Fuel Economy while Cutting Down on Oil Consumption.

I. Introduction

Over the past few years, controversy and debate have surged over what action the government should take to stabilize rising and fluctuating fuel prices. Motorists are being hit especially hard. In 2004, the retail price for motor gasoline in terms of real dollars,[1] reached $1.78 per gallon.[2] To add perspective, this is the highest price motorists have paid for gasoline in nineteen years.[3] The 2004 price even exceeds the spike in oil prices during the Persian Gulf War.[4] More recently, following the hurricane Katrina disaster, crude oil prices breached the seventy dollars per barrel mark as half of the refineries in the Gulf of Mexico were temporarily shut down.[5]
Part of the problem involves the tremendous amount of oil that the United States consumes. In 2004, the United States consumed on average 20.7 million barrels of oil a day.[6] A number exceeding the next five largest oil consuming countries combined: China, Japan, Germany, Russia, and India.[7] To sustain this consumption rate, the United States must import 12.1 million barrels of oil each day.[8]
While there are many avenues available to combat rising and fluctuating fuel prices, and many areas of the United States economy in which this can be done, this article focuses on the transportation sector and specifically the Corporate Average Fuel Economy (CAFE) program which was established in 1975 by Congress to improve fuel economy in passenger vehicles. Because roughly 44% of the total petroleum products produced in the United States are used in gasoline-powered engines,[9] automobile fuel economy plays a significant role in how much oil the country consumes. With the potential to reduce the nation’s dependence and consumption of oil in mind, this comment sets out to defend the CAFE program and argue why future CAFE standards and classification of passenger vehicles should be subjective rather than a rigid set of classifications and guidelines.
To accomplish this, the comment is organized into seven sections, the first being the introduction. The second section presents basic information on the CAFE program. The third section defends Congress’s authority to regulate fuel economy through the CAFE program. The fourth section examines some of the social problems associated with the CAFE program. The fifth section examines how automobile manufactures have exploited the rigid classification structure of the CAFE program and the benefits of a subjective classification system for passenger vehicles. The sixth section analyzes the future of CAFE with a specific emphasis on the new classification system suggested for light-duty trucks. The final section of this paper argues why the CAFE program should continue and the merits of a subjective classification system for passenger vehicles.

II. Background

In 1975, following the oil crisis that resulted from OPEC’s 1973-1974 embargo, the United States Congress passed the Energy Policy and Conservation Act.[10] The express goal of the Energy Policy and Conservation Act is “to increase domestic energy supplies; to restrain energy demand; to prepare for energy emergencies; and for other purposes.”[11] One of the most controversial provisions of this act was the Corporate Average Fuel Economy program, CAFE.
Congress implemented CAFE by establishing a maximum feasible fuel economy level of eighteen miles per gallon for model year 1978 passenger[12] automobiles.[13] The maximum feasible fuel economy level is a fuel efficiency standard for a given year that Congress establishes based on four factors: technological feasibility, economic practicability, effect of other standards on fuel economy and the need for the nation to conserve energy.[14] With eighteen miles per gallon in model year 1978 as the starting point, congress established maximum feasible fuel economy levels for model years 1979 (19 mpg), 1980 (20 mpg), and for 1985 and thereafter (27.5mpg).[15] During model year 1981-1984, Congress left the standard to the discretion of the transportation department.[16]
For light-duty trucks,[17] Congress gave discretion to the National Highway and Safety Administration to establish a default standard for each model year.[18] The NHSA set the default standard for light trucks beginning in model year 1979 at 17.2 miles per gallon.[19] Originally, a manufacturer was allowed to separate light trucks into either two-wheel drive or four-wheel drive fleets.[20] In model year 1992, the 2- and 4-wheel drive fleet distinction ended.[21] Thereafter, each company’s fleet of light trucks had to meet one standard.[22]
Throughout the years following 1985, the year in which CAFE reached its goal of doubling fuel economy in passenger cars, CAFE standards remained stagnant and in some periods even relaxed. Car manufacturers GM, Ford, and Toyota successfully petitioned the National Highway Traffic and Safety Administration to lower CAFE standards.[23] Following 1985, CAFE standards were lowered from 27.5 miles per gallon, to 26 miles per gallon from 1986 to 1988.[24] In 1989 the CAFE standards were increased to 26.5 miles per gallon.[25] Finally, in 1990 fuel economy standards returned to the 1985 level of 27.5 miles per gallon.[26] Since this time, CAFE standards for passenger cars have remained at the 27.5 mile per gallon level despite attempts to increase these standards.[27]
In addition to setting fuel economy levels, Congress also authorized penalties against automakers who failed to comply with CAFE standards. Currently, no American or Japanese auto manufacturer has paid civil penalties for failing to comply with CAFE standards.[28] However, European Car companies have paid millions of dollars in CAFE fines each year.[29]
While stiff penalties face any auto manufacturer who falls below CAFE standards,[30] Congress also allowed auto manufactures to build up credits for years in which they exceed CAFE standards.[31] These credits can be applied to any three consecutive model years immediately prior to or subsequent to the model year in which the credits are earned.[32] If the company fails to exercise these credits within the immediate three years following the year in excess, they forfeit the credits.[33]
Despite stagnant CAFE standards for the past decade, recently new standards were implemented for light duty trucks that now make up almost a majority of the vehicles on the road.[34] Beginning with model year 2005, fuel economy standards increased from 20.7 miles per gallon to 21.0 miles per gallon. Congress also permitted the CAFE level to be increased in 2006 to 21.6 miles per gallon and finally 22.2 miles per gallon in 2007.[35] The CAFE standards for each model year, are summarized in the table below.
(Removed do to formatting)

III. Constitutional Authority for Congressional Regulation of Fuel Economy in Passenger Vehicles

Government regulation of an industry can lead to questions of whether that regulation violates economic substantive due process. In effect, substantive due process asks whether the government has a sufficient reason that would justify a taking of a person’s life, liberty or property.[38] An economic substantive due process analysis offers an attractive framework to assess whether Congress has the authority to regulate fuel economy through the CAFE program. The question that arises is whether the benefit provided by the CAFE program would not only pass Constitutional muster but also outweigh the disparate impact it has on automakers and the car buying public.
Under any substantive due process analysis there must be a taking, either life, liberty, or property.[39] At the very least, setting minimum fuel economy standards interferes with the freedom of contract.[40] Furthermore, the fines assessed against auto manufacturers, who fail to meet CAFE standards, represent a property taking. In 2002, BMW of North America paid $14,066,123,50 in CAFE fines and in 2000, Mercedes-Benz USA LLC. was fined $18,959,292.[41] Altogether, auto manufacturers have paid $618,874,891.50 in CAFE fines since the program’s implementation.[42] In support of the notion that fines can be considered a property takings, BMW of North America, Inc. v. Gore, held grossly excessive punitive damages imposed by a state violated the due process clause of the 14th amendment.[43] Although a violation of CAFE standards result in a civil penalty,[44] it can be inferred from BMW of North America, Inc. v Gore that at the very least, a penalty imposed by the government represents a taking separate from an issue of whether it is excessive or not.[45]
The current analysis for economic substantive due process stems from the Supreme Court’s decision in United States v. Carolene Products Co. Under this analysis, Congress must have a rational basis for any regulatory legislation affecting ordinary commercial transactions unless the regulation appears on its face to be a specific prohibition of the Constitution.[46] Because the CAFE program on its face does not prohibit a specific provision of the Constitution, the government must show that it has a rational basis for regulating fuel economy in new vehicles.
In 2001, Congress requested that the National Academy of Sciences and Department of Transportation, conduct a study to determine the effectiveness and impact of CAFE standards.[47] Congress asked the committee, in addition to many other things, to assess the need for the United States to conserve energy.[48] The report identified many reasons why the CAFE program should remain in place.[49] These benefits show that a rational basis exists for Congress to regulate fuel economy through the CAFE program.
By increasing fuel economy in automobiles, the country is less dependant on oil imports. The 2001 committee found a strong association between oil price shocks and recessions in the United States economy.[50] In 2004, the United States imported 12,899,000 million of barrels a day in crude oil.[51] Domestic production of crude oil is only 5,430,000 barrels a day.[52] Additionally, domestic output of oil has been steadily declining since 1985.[53] As the United States increases its dependency on foreign oil, it leaves its economy vulnerable to fluctuations from outside sources such as embargoes[54], war[55], and natural disasters[56]. Of the 20.7 million barrels of oil that the United States consumes each day, 13.6 million barrels go towards transportation use and specifically 8.6 million barrels are consumed in gasoline motors.[57] Because passenger cars and light duty trucks account for over 60 percent of transportation energy use[58] the CAFE standards have a significant impact on the total amount of fuel consumed by the U.S. Any increase in fuel economy set by CAFE would result in decreased consumption. This would give our economy greater flexibility in absorbing and lessening the impact of any fluctuations in foreign oil prices.
Increased fuel economy standards also have beneficial effects on our environment. According to the Committee report for the Effectiveness and Impact of Corporate Average Fuel Economy Standards, “Scientific evidence continues to accumulate supporting the assertion that emissions of greenhouse gases from the combustion of fossil fuels are changing Earth’s climate.”[59] The committee mentions that scientific evidence suggests that the increase in greenhouse gases is resulting in global warming, which causes the sea level to rise and increases in the frequency of extreme whether events.[60] Concern over this correlation has prompted the European Union and Japan to take steps to reduce CO emissions from cars.
The committee states that reduced fuel consumption reduces carbon monoxide emissions.[61] The United States light-duty vehicles alone account for roughly five percent of the entire world’s greenhouse gases.[62] It would seem logical therefore, that increasing fuel economy would have a positive effect on the environment by reducing greenhouse gases. Despite this seeming simplicity, increased fuel economy also results in an increase in the amount of miles driven. The committee report calls this phenomenon the rebound effect and estimates that “a 10 percent increase in fuel economy is likely to result in roughly a 1 to 2 percent increase in vehicle travel, all else being equal.”[63] This rebound effect dampens the positive effect that reduced fuel consumption may have on the environment.
Despite this rebound effect, there is good evidence that CAFE standards have led to decreased fuel consumption.[64] The committee shows that prior to 1978, the year in which CAFE standards were put into place, fuel consumption was growing at a rate greater then the amount of vehicle miles traveled(VMT) each year.[65] From 1978 to 1982 the effects of higher fuel economy from new vehicles resulted in fuel consumption rates lower then the rate of growth of VMT.[66] The report suggests that if there had been no CAFE standards, and the higher fuel consumption rates prior to CAFE continued despite a lower rate of VMT, in 2001 the United States would be consuming about 3.6 million barrels per day of gasoline.[67] This evidence at least suggests that overall, despite the rebound effect, fuel consumption was reduced because of the CAFE program and less greenhouse gases were emitted from vehicles compared to what might have been.
Under an economic due process test, the CAFE program passes Constitutional muster. The state has two rational bases for implementing the CAFE program. Decreasing oil consumption in the transportation sector would allow the United States to decrease the amount oil it imports if foreign prices became volatile. This becomes especially important when protecting against macroeconomic impacts resulting from crises outside the United States. Because of the strong correlation between economic recessions and rising oil prices, the state has a rational basis for wanting to protect the economic welfare of its people. Furthermore, the state has a health interest in implementing the CAFE program. The CAFE program, has substantially decreased the amount of oil consumed by passenger vehicles. This has a positive effect on the environment because better fuel economy leads to fewer greenhouse gases released into the air.[68]

IV. The Adverse Social and Economic Impact Resulting from
the CAFE program.

Despite the benefits of increased fuel economy from the CAFE program, this progress has not come without a social and economic cost.
First among these concerns is safety. There is evidence that CAFE standards have lead to an increased number of auto related deaths.[69] The majority of the 2001 CAFE committee found that downsizing and weight reduction during the late 70’s and early 80’s likely caused between 1300 and 2600 crash fatalities.[70] Furthermore, the committee also found that 13,000 to 26,000 additional serious injuries by 1993 resulted from downsizing and weight reduction many auto manufactures chose to pursue in order to meet CAFE standards.[71] In an article in the New York Times, administrator for the National Highway Traffic Safety Administration, Dr. Jeffrey W. Runge stated, “Clearly, we would love to decrease our dependence on foreign oil down to zero, but what the environmentalists ignore is that, until we phase out the old system, every tenth of mile a gallon that we raise CAFE beyond what is technologically feasible, we kill people. We're against killing people.”[72]
The most important part of the administrator’s statement is “every tenth of mile a gallon that we raise CAFE beyond what is technologically feasible, we kill people.”[73] Under the statute, the Secretary of Transportation “may prescribe regulations amending the standard… for a model year to a level that the Secretary decides is the maximum feasible average fuel economy level for that model year.”[74] The National Highway Traffic Safety Administration’s website states that congress intended the maximum feasible average fuel economy level to be calculated using four factors: Technological feasibility, economic practicability, effect of other standards on fuel economy, and the need of the nation to conserve energy.[75] These four factors for determining fuel economy do not adequately consider the safety implications of increases in fuel economy. Until a safety factor is prominently included in the analysis to establish the maximum feasible average fuel economy level, casualties due to future fuel economy increases under the current CAFE program are likely to result in more deaths.
While the 2001 committee admits that it is likely that CAFE standards increased severe injuries and auto related deaths, the committee also takes note of other variables that may have contributed. One example is the change in the national 55 mph speed limit starting in 1987.[76] The increase in the speed limit resulted in decreased fuel economy by about 1 to 2 percent while increasing fatalities in motor vehicle crashes.[77] Another significant variable is the mix of different types of vehicles. Both the 2001 and 1992 committees found that occupants driving larger vehicles such as trucks or SUVs were less likely to be hurt or killed in an impact with a smaller car.[78] However, at the same time it is true that prior to CAFE standards people were driving compact cars. Concerning those individuals already driving lightweight cars, their safety likely increased as the overall mass of vehicles on the road decreased because of CAFE standards.[79] Despite this positive effect to those already owning light weight cars, the overall effect of a 500-lb weight reduction in the heaviest 20% of cars, midsize SUVs and large SUVs underwent a 500-lb weight reduction, would have resulted in 250 additional car related fatalities and about 65 fewer fatalities for light trucks, based on data for the 1999 model year.[80] Overall, this would result in a net increase of 195 auto related fatalities despite a positive effect to smaller vehicle occupants.[81]
In addition to safety concerns, automobile manufacturers suffer economic hardships due to CAFE regulation. It is clear that CAFE standards have a different impact on American, Japanese, and European car companies. Following CAFE regulation in 1975, domestic car manufacturers had to substantially improve the fuel economy of their car fleets.[82] For American car companies, CAFE standards acted as goals for the companies. Japanese automobile manufacturers were already well above the new standards and did not have to devote as many resources to develop fuel-efficient technologies.[83] For many Japanese car producers the new fuel economy regulations acted as a floor in which fuel economy should not drop below. European car companies such as BMW, Porsche, and Mercedes, whose focus is on performance and luxury, chose to pay the civil fines associated with non-compliance rather than compromise other characteristics of there cars. Regardless of the individual effects of CAFE regulation, it is clear that additional resources are expended or diverted from other areas of research and development to improve fuel economy.

V. Increasing the Effectiveness of the CAFE Program by Implementing Subjective Standards and Classification

One of the main problems with CAFE is the all-encompassing exclusion of any vehicle over 8500 gross vehicle weight from CAFE standards.[84] Understandably, Congress wanted to limit CAFE standards to passenger vehicles. Back in 1984, when the curb weight for a light duty truck was 3804 lbs.,[85] an 8500 lbs. gross vehicle weight[86] limit seemed like a reasonable means of ensuring that the large trucks millions of people and businesses depended on to transport valuable goods would not be hamstrung by fuel economy standards.[87] Even today, “eighteen wheelers” require long stretches of road to merge on to highways with speed limits in some cases exceeding 65 mph. Holding these trucks to the same fuel economy standards would impose unnecessary risks to the drivers of these trucks and other passenger vehicles as horsepower and torque, necessary to allow these trucks to merge onto fast moving stretches of road, is reduced to meet CAFE standards.
However, it seems a fair conclusion, based on relatively low average weight of trucks during the early years of CAFE,[88] that Congress could not have foreseen a passenger vehicle exceeding the statutory limit of 6000 lbs, let alone the revised weight limit increase of 8500 lbs. Currently the H2 and H1 produced by Hummer, a line of vehicles owned by GM, are both exempt from CAFE standards and not tested by the EPA to determine the fuel efficiency because they surpass the statutory weight limit.[89] Contrary to many consumer and environmental groups, which have condemned the H2 and H1,[90] this comment is merely concerned with the lack of accountability companies enjoy when producing these large trucks which are used by the public. At the very least, these vehicles should be subject to EPA testing. With more information such as EPA fuel economy measurements, which are readily comparable to other trucks on the market, a buyer can make a more educated decision.
More importantly, the regulatory weight limit, exempting certain vehicles from CAFE standards should be replaced with a more subjective standard. A subjective standard, properly created and administered, would prevent auto manufactures from exploiting such technicalities. While a subjective standard leaves room for uncertainty, it is hard to argue that it would not be readily ascertainable to consider which vehicles are used primarily for transporting people, and should be encompassed within CAFE standards. Under a subjective standard, companies would have no regulatory incentive to build vehicles beyond a certain weight, unless market forces suggested a demand for these size vehicles. In such an instance, a subjective standard would not prevent a company from producing vehicles such as the H1 and H2. Rather, companies would have to find a way to balance the fuel economy standards of these large trucks with, more fuel-efficient trucks.
Another flaw in the regulatory language is the broad classification of light duty trucks. As defined by the NHTSA, a vehicle is classified a light duty truck if it is:
a 4-wheel vehicle which is designed for off-road operation (The characteristics are: (A) an approach angle of not less than 28 degrees; (B) a break-over angle of not less than 14 degrees; (C) a departure angle of not less than 20 degrees; (D) a running clearance of not less than 20 centimeters; and (E) front and rear axle clearances of not less than 18 centimeters each (41 FR 55368, 55371; December 20, 1976). ); or which is designed to perform at least one of the following functions: (1) transport more than 10 people; (2) provide temporary living quarters; (3) transport property in an open bed; (4) permit greater cargo-carrying capacity than passenger-carrying volume; or (5) can be converted to an open bed vehicle by removal of rear seats to form a flat continuous floor with the use of simple tools. [91]

The rise of “cross over vehicles,” vehicles that have truck characteristics, but are built on the same platform as a car, further blur the distinction between cars and trucks. One of the questions that concerned the 2001 Congressional Committee was the effect crossover vehicles would have on the auto market. Would these crossover vehicles attract potential car buyers, leading to a decrease in overall fuel economy?[92] On the other hand, would potential SUV and truck buyers be persuaded instead to purchase crossover vehicles, possibly improving over all fuel economy? The committee could not answer this question at the time due to a lack of information due to this trend being relatively new.[93] Currently, the NHTSA categorizes crossover vehicles, such as the Chrysler Pacifica, Buick Rendezvous, and Lexus RX 330 as light duty trucks under current CAFE standards.[94]
While it is unclear whether crossover vehicles should be classified as a car or light-duty truck, auto manufactures have taken advantage of the rigid language defining a light duty truck. Chrysler’s front wheel drive PT cruiser is classified as a light duty truck by the NHTSA.[95] Chrysler was able to achieve this by making the back seats removable, creating a flat, continuous floor pursuant to part 5 of the current light-duty truck classification.[96] Despite this technicality, few people would consider the PT Cruiser a light duty truck. Chrysler’s own website offers a link where you can compare the PT Cruiser to other “similar vehicles”.[97] Is it any surprise that the list does not include a single pickup truck, SUV, or minivan?[98] By allowing auto manufactures to create a vehicle that otherwise would be classified as a passenger car if it did not include the additional design element, the goals of the CAFE program would be better preserved.
This practice was taken one-step further as Subaru decided to implement changes to its model year Outback sedan.[99] These changes allow the 2005 model year outback sedan, previously classified as a passenger car, to be reclassified as a light duty truck.[100] A New York Times article reported that Subaru said, “The new Outback… will retain its not-an-S.U.V. image because the changes being made are technical in nature.”[101] The article also reported that a spokesman for the NHTSA, commenting on this type of practice stated, “a vehicle either met the specific technical requirements of being a light truck, or it did not. ‘They aren't a judgment call.’”[102]
Perhaps the response to such techniques by the auto-industry should be a judgment call. Congress entrusted the head of the department of Transportation with the responsibility of carrying out and enforcing CAFE standards.[103] Clearly, a judgment call deciding whether a vehicle is a passenger car or a light duty truck would not fall outside the scope of power granted to the Department of Transportation by Congress.[104] A judgment call would have the benefit of preventing vehicles from being classified as a light duty truck when the purpose and use lean more towards that of a passenger car. While uncertainty may exist in some cases, preliminary conferences with members of the transportation department chosen to determine the appropriate classification early in the design process would alleviate much of the uncertainty. Additionally, as precedents are set, certainty would increase as time went on.
Implementing subjective standards would give the CAFE program greater flexibility and effectiveness. The goals of the 1975 Energy Conservation Act[105] could be met through increasing active governance by the transportation department. By implementing subjective standards instead of rigid rules, vehicles currently exempt from CAFE standards and misclassified, can be properly included within the CAFE program. Companies that produce these vehicles will therefore be held accountable if the primary purpose and use of the vehicles previously excluded or mischaracterized does not differ from those vehicles already properly regulated by the CAFE program. This will lead to an increase in fuel efficiency without raising the fuel economy level.

VI. Recent CAFE Legislation

On August 23, 2005, Transportation Secretary Norman Y. Mineta announced a new proposal to reform the government’s Corporate Average Fuel Economy (CAFE) program for light trucks.[106] Mineta expects the new plan to save 10 billion barrels of oil in the years to come. National Highway Traffic Safety Administrator Jeffrey Runge stated, “When fully implemented in 2011, all new light trucks will be required to meet miles per gallon targets based on vehicle size.”[107] Altogether, there is a proposed six size categories for automobiles, each with its own improved fuel economy target.[108] The new plan is expected to become final by April 2006.[109]
Although the plan has not yet been finalized, the tentative plan suggests three ways CAFE standards would be applied to the proposed six new classes of automobiles.[110] The first proposed method for calculating fuel economy is to use a weight-based standard based on a relationship in which fuel consumption (gallons per mile) varies with respect to curb weight.[111] The second method is similar, but relies on the size of the automobile. Both methods, it is suggested, would discourage automakers from reducing the mass of a car and making it less safe.
While the weight based standard may discourage weight reduction, what incentive would an automaker have to keep a vehicle within a weight bracket? This is especially true for vehicles on the fringe of a weight class. Instead of implementing expensive technology such as six speed transmissions or DOHC engines, a few pounds of sound deadening material might bump the car up to a higher weight class and alleviate the need to make the car more fuel-efficient. Undeniably, under this system any weight increase would have the drawback of making the car less fuel-efficient. In order for this system to be effective, these weight categories must be calculated with precision. If the differences in CAFE standards between levels is disproportionate, automakers will choose to move up in weight class, where lower CAFE standards are in place if the additional weight does not lower the fuel economy of the car below the heavier classes new CAFE level. Example: Weight-Based Standards[112]
The same dangers exist in a size based system. What incentive does an automaker have to not increase the size of their vehicles so they can avoid the stricter CAFE standards assigned to smaller vehicles? The auto industry already offers different size options for vehicles, such as extended cab pickup trucks and the Signature version of the Lincoln Town Car, which is six inches longer, than the base model.[113]
Example: Size-Based Standards[114]
The third method is a weight efficiency measure. This system looks at the fuel efficiency of a vehicle in relation to its weight and or size. Cars that weight more, but are more fuel efficient, would be rewarded with extra CAFE credits. This method seems to promote safety while at the same time offering less of an incentive to “bump up” an automobile into a different size or weight class to avoid stricter CAFE standards. Of course, unless the standards and incentives are calculated with precision, automakers might still be encouraged to somehow cheat the system.
Example: Weight-Based Standard with "Extra Credit" for "Weight Efficiency"[115]
Unfortunately, the proposed plan listed by the NHTSA still exempts cars with a gross vehicle weight above a set limit. As discussed in previous sections, as long as automakers are provided a threshold weight, the temptation will exist to make a vehicle so heavy that it is exempt from CAFE standards. This could be prevented if a subjective standard was applied based on the function and use of the vehicle.
While these proposed changes are still tentative, they illustrate the difficulty involved with creating a system that addresses all the public’s concerns. Despite the potential deficiencies of this proposed system, the renewed interest in the CAFE program by legislators and the public hopefully will bring new incite and ideas to help alleviate and solve this nation’s energy concerns.

VII. Conclusion

The ideals of the CAFE program are worth pursuing. Every year the United States consumes tremendous quantities of oil that eventually will run out.[116] Regardless of when oil supplies will run out, we only harm ourselves by wasting oil. Despite the good and the bad, the underlying goal of the CAFE program is worth attaining. The CAFE program has provided almost thirty years of invaluable data that can be used to improve the current CAFE program and eliminate its weaknesses. New technologies and old technologies exist that could dramatically increase fuel economy if implemented.[117]
The recent attention that the CAFE program has generated proves that improving fuel economy, now more than ever, is a goal worth achieving. Despite the unintentional drawbacks associated with the program, future CAFE programs will have the benefit of almost thirty years worth of data and experience which will prove invaluable in overcoming the current obstacles associated with the program. However, while human ingenuity will undoubtedly overcome the current obstacles, human ingenuity will also find ways of exploiting any rigid set of rules that attempts to regulate the automobile industry. Perhaps the only way to achieve true effectiveness is by creating a CAFE program that can immediately respond to changes and trends that will undoubtedly develop in the coming years. Therefore, new regulations and classification should be subjective, decided by a group of independent persons who can make fair and unbiased decisions and respond to new trends in the automobile industry while quickly remedying any flaw in the program that may be exploited. It is through this type of flexible classification and regulation that the worthwhile goals of the CAFE program will be achieved.




















[1] Annual Energy Review 2004, Energy Info. Admin., 1, 179(2005)(defining real dollars as year 2000 dollars calculated by using gross domestic product implicit price deflators), available at http://www.eia.gov/em eu/aer/pdf/aer.pdf (last viewed Dec. 12, 2005)[hereinafter AER 2004].

[2] Id. This number is used to represent an average price for all grades of retail gasoline. Id.

[3] Id. In 1985, the real price for retail gasoline reached an average of $1.88 per gallon. Id.

[4] Id. In 1990 the real price for retail gasoline spiked to $1.49 and finally leveled off to a $1.30 in 1994). Id.

[5] Crude Oil Tops $70 per Barrel, M&C News,(Aug. 29, 2005), available at http://news.monstersandcritics.com/ business/article_1044485.php/Crud e_oil_tops_$70_per_barrel (last viewed Dec. 12, 2005).

[6] Energy Info. Admin., Non-OPEC Fact Sheet, http://www.eia. doe.gov/emeu/ cabs/topworldtables3_4.html (Last visited Jan. 20, 2005).

[7] Id.

[8] Id.

[9] AER 2004, supra note 1. at 146.

[10] CAFE Overview – Frequently Asked Questions, National Highway and Traffic Safety Administration, http://www.nhtsa.gov/cars/rules/ CAFE/overview.htm (Last visited Jan. 20, 2005)[Hereinafter CAFE Overview].

[11] Congressional Information Service, Inc., Legislative History of: P.L. 94-163 Energy Policy and Conservation Act,(1975).

[12] H. Rept. 94-700 (1976)(Passenger automobiles defined as those used primarily for the transport of individuals).

[13] CAFE Overview, supra note 10.

[14] Id.

[15] Id.

[16] Id.

[17] Reforming the Automobile Fuel Economy Standards Program, 49 C.F.R. Pt. 533 (The agency’s definition of a light truck as capable of off-highway operation, weighing more than 6500 lbs. or designed to perform a certain function as discussed in greater detail later on).

[18] Id.

[19] CAFE Overview, supra note 10.

[20] Id. Four-wheel drive vehicles are generally less fuel efficient then two-wheel drive vehicles. See generally infra note 48.

[21] Id.

[22] Id.

[23] Id.

[24] NHTSA, The Summary of fuel econ. Performance Mar. 2004 Rep. (2004) available at http://www.nhtsa.gov/cars/rules/CAFE/ docs/Summary-Fuel-Economy-Pref-2004.pdf (last visited Jan. 20, 2005).[Hereinafter NHTSA Fuel Performance].

[25] Id.

[26] Id.

[27] Id.

[28] NHTSA, The Summary of Cafe Fines Collected (2004) available at http://www.nhtsa.gov/cars/rules/CAFE/FINES-COLLECTED-SUMMARY.html (Last visited Jan. 20, 2005)[Hereinafter CAFE Fines].

[29] See Id.

[30] CAFE Overview, supra note 10. The current penalty for failing to meet CAFE standards is $5.50 per tenth of a MPG under the target value times the total volume of those vehicles manufactured for a given model year. Id.

[31] Id. Surplus credits generated from the three previous years can be used to make up the deficit. Id.

[32] Id.

[33] Id.

[34] See Press release, NHTSA U.S. Secretary Mineta Unveils Plan Requiring Better Gas Mileage from SUVs, Pickups and Mini-vans (Aug. 23, 2005) http://nhtsa.gov/portal/site/nhtsa/template.MAXIMIZE/menuitem.f22 17bee37fb302f6d7c121046108a0c/?javax.portlet.tpst= 1e51531b2220b0f8ea14201046108a0c_ws_MX&javax.portlet.prp_1e51531b2220b0f8ea14201046108a0c_viewID=detail_view&javax.portlet.begCacheTok=token&javax.portlet.endCacheTok=token&itemID=d674acd2593e5010VgnVCM1000002c567798RCRD&overrideViewName=PressRelease.

[35] CAFE Overview, supra note 10.

[36] NHTSA Fuel Performance, supra note 24.

[37] CAFE Overview, supra note 10.

[38] See Erwin Chemerinsky, Constitutional Law 451 (Richard A. Epstein ed., Aspen Publisher 2001)(2001)(“The focus is on the sufficiency of justification for the government’s action”).

[39] See Id.

[40] See generally Williams v Standard Oil Co., 278 U.S. 235 (1929)(Declaring maximum prices for gasoline unconstitutional as interfering with freedom of contract). See also Weaver v Palmer Bros Co., 270 U.S. 402 (1926)(Declaring unconstitutional a provision banning the use of shoddy in comfortables as violating the Due Process Clause despite evidence that unsterilized shoddy could spread disease).

[41] CAFE Fines, supra note 28.

[42] Id.

[43] See Generally BMW of North America, Inc. v Gore, 517 U.S. 559(1996).

[44] § 32912. Civil penalties. TITLE 49, UNITED STATES CODE,SUBTITLE VI. MOTOR VEHICLE AND DRIVER PROGRAMS PART C. INFORMATION, STANDARDS, AND REQUIREMENTS. CHAPTER 329. AUTOMOBILE FUEL ECONOMY.

[45] See Generally BMW of North America, Inc., 517 U.S. 559(1996)

[46] See United States v. Carolene Products Co., 304 U.S. 144(1938)(“Regulatory legislation affecting ordinary commercial transactions is not to be pronounced unconstitutional unless in the light of the facts made known or generally assumed it is of such a character as to preclude the assumption that it rests upon some rational basis within the knowledge and experience of the legislators”).

[47] H.R. Rep. 106-940(2000)(As published in the Congressional Record. Oct. 5, 2000, pp.H8922-H9004) Please note that in the text of the committee report on page one, the report lists the incorrect Congressional Record page as ppH8892. The correct page is listed in this citation as H8922. Id.

[48] See generally The Nat’l Academies of Science, Comm. on the Effectiveness and Impact of Corporate Average Fuel Econ., Report on the Effectiveness and Impact of Corp. Average Fuel Econ. (CAFE) Standards (Comm. Print 2001)[Hereinafter 2001 Cafe Report].

[49] See generally Id.

[50] Id. at 13.

[51] AER 2004, supra note 1. at 127.

[52] 2001 Cafe Report, supra note 48. at 13

[53] Id.

[54] The OPEC oil embargo of 1973-74 is the prime example of how vulnerable our economy is to manmade foreign supply shortages.

[55] The 1992 fuel economy committee appointed by congress cited the Persian Gulf War as a prime example of how vulnerable our supply of oil is to outside sources of turmoil. See generally Id.

[56] Hurricane Katrina is the most recent example of how natural disasters can impact oil supplies. While this happened in the United States there is nothing to suggest the same thing could happen in other countries causing similar results to the flow of oil.

[57] AER 2004, supra note 1. at 188.

[58] 2001 Cafe Report, supra note 48. at 13

[59] Id.

[60] Id. at 13-14.

[61] See Id. at 20.

[62] See Id.

[63] See Id, at 19.

[64] See Id.

[65] See Id. at 19.

[66] See Id.

[67] See Id.

[68] See Generally Id. at 20.

[69] See Generally Id. at Chap 4.

[70] See Id. at 77.

[71] See Id.

[72] Danny Hakim, IDEAS & TRENDS: Car Talk: Conserving Gas; Does Lighter Equal Deadlier, N.Y. Times, Aug. 28, 2005, Sunday Late Edition - Final SECTION: Section 4; Column 1.

[73] Id.

[74] §32902(C). Average fuel economy standards, TITLE 49, UNITED STATES CODE, Chapter 329.

[75] CAFE Overview, supra note 10.

[76] 2001 Cafe Report, supra note 48. at 77.

[77] Id.

[78] Id. at 26.

[79] See generally Id.

[80] See Id. at 76.

[81] See Id.

[82] See Id. at 20.

[83] See Id.
[84] Reforming the Automobile Fuel Economy Standards Program, 49 C.F.R. Pt. 533.
[85] Light Truck Fleet Average Characteristics, National Highway and Traffic Safety Administration, http://www.nhtsa.gov/cars/rules/ CAFE/LightTruckFleet.htm (Last visited Jan. 20, 2005).

[86] Reforming the Automobile Fuel Economy Standards Program, 49 C.F.R. Pt. 533. In 1980 the limit was raised from 6000 lbs. gross vehicle weight to 8500 lbs. gross vehicle weight. Id.

[87] Id.

[88] See generally Light Truck Fleet Average Characteristics, National Highway and Traffic Safety Administration, http://www.nhtsa. gov/cars/rules/CAFE/Light TruckFleet.htm (Last visited Jan. 20, 2005).

[89] GM Vehicle Showroom, All Hummer Vehicles, GM, http://www.gmbuypower.com/vehicleList.bp?null&identifyThumbnail=showAllMake&make=HUMMER&makeId=007&sortBy=fuelEconomyForModel (Last visited Jan. 20, 2005).

[90] See generally Reforming the Automobile Fuel Economy Standards Program, 49 C.F.R. Pt. 533.

[91] Id.
[92] See generally 2001 Cafe Report, supra note 48.

[93] Id. at 10.

[94] Reforming the Automobile Fuel Economy Standards Program Request for Product Plan Information, 49 C.F.R. Pt. 533, http://www.nhtsa.dot. gov/cars/rules/CAFE/rulemaking/CAFEReformdata.html.

[95] Reforming the Automobile Fuel Economy Standards Program, 49 C.F.R. Pt. 533, http://www.nhtsa.dot.gov/cars/rules/CAFE/rulemaking/ ANPRM_Dec22-2003.html.

[96] Id.

[97] Edmunds.com, Competitive Comparison, http://dcx.edmun ds.com/products/nvc/chrysler/VehicleComparison?basemodelid=100505885&modelid=100504627&modelid=100506349&modelid=100505525&modelid=100506346&op=8

[98] See Id.

[99] Danny Hakim, To Avoid Fuel Limits, Subaru Is Turning a Sedan Into a Truck, N.Y. Times, (Jan. 13, 2004)(Discussing how Subaru is able to turn its outback sedan, previously classified as a passenger vehicle, into a light duty truck).

[100] Id.

[101] Id.

[102] Id.

[103] CAFE Overview, supra note 10.

[104] Id.

[105] See generally CAFE Overview, supra note 10.

[106] Press release, NHTSA U.S. Secretary Mineta Unveils Plan Requiring Better Gas Mileage from SUVs, Pickups and Mini-vans (Aug. 23, 2005) http://nhtsa.gov/portal/site/nhtsa/template.MAXIMIZE/menuitem.f22 17bee37fb302f6d7c121046108a0c/?javax.portlet.tpst=1e51531b2220b0f8ea14201046108a0c_ws_MX&javax.portlet.prp_1e51531b2220b0f8ea14201046108a0c_viewID=detail_view&javax.portlet.begCacheTok=token&javax.portlet.endCacheTok=token&itemID=d674acd2593e5010VgnVCM1000002c567798RCRD&overrideViewName=PressRelease.

[107] Id.

[108] Id.

[109] Id.

[110] Reforming the Automobile Fuel Economy Standards Program, 49 C.F.R. Pt. 533, http://www.nhtsa.dot.gov/cars /rules/CAFE/rulemaking/ ANPRM_Dec22-2003.html.

[111] Id.

[112] Id.

[113] Lincoln, Specs and Features, http://www.lincoln.com/ towncar/models.asp?feature=dimensionsandampcapacities (Last visited Jan. 20, 2005)

[114] Reforming the Automobile Fuel Economy Standards Program, 49 C.F.R. Pt. 533, http://www.nhtsa.dot.gov/ cars/rules/CAFE/rulemaking/ ANPRM_Dec22-2003.html.

[115] Id.

[116] See Kenneth Deffeyes, It’s the End of Oil, Time Magazine, Oct. 31, 2005, at 66 (discussing the theory that world oil production has peaked and the world is consuming more oil then is found). But see Peter Huber, Oil is Here to Stay, Time Magazine, Oct. 31, 2005, at 66 (arguing that vast untapped oil fields exist that could sustain the United States current level of oil consumption for decades to come if sufficient technology and resources were used to recover this oil).

[117] The Nat’l Academies of Science, Comm. on the Effectiveness and Impact of Corporate Average Fuel Econ., Report on the Effectiveness and Impact of Corp. Average Fuel Econ. (CAFE) Standards, Letter Report: Technology and Econ. Analysis in the Prepublication Version of the Report on the Effectiveness and Impact of Corp. Average Fuel Econ. (CAFE) Standards Appendix F (Comm. Print 2001) In the National Academies follow up report in 2002, the committee found, that numerous technologies already exist that would dramatically increase fuel economy. The committee uses an example the development by Chrysler of a new 2.7 liter engine. This new engine resulted in 40 more horsepower then its older equivalent while using ten percent less fuel. The committee also mentions a new technology called variable compression ratio engine, which can achieve a 30 percent fuel consumption reduction compared to a naturally aspirated engine. Id.