Bad gas?

  • 24-Aug-2016 12:51 EDT

It’s often the case with proverbs that many are of uncertain derivation. That’s true of one of my go-to favorites: “May you live in interesting times.”

The irony with this one isn’t so much its origin as that it’s typically misconstrued to be a positive wish to someone. Just the opposite: it’s generally believed to be a translation of a barbed Chinese curse hoping you experience a life of fleeting tranquility.

I can’t think of a phrase more apropos to an industry with so many diligent minds devising so much promising technology, yet the advances never seem enough to stay more than one step ahead of the sheriff. As multi-talented engineer Steven Sherman’s cover story so adroitly explains, the automakers’ shaky menage-a-trois with customers and the U.S. Clean Air Act is a dance of confounding—and increasingly expensive—complexity.

The trigger for Sherman’s no-stones-unturned explanation of the greenhouse-gas conundrum is the U.S. Environmental Protection Agency’s Mid-Term Evaluation of technical feasibility to achieve the 2022-25 federal emissions (or fuel-economy, take your pick) standards adopted by the Obama administration in 2012. The final findings of the MTE still are almost two years away, but speculating on the outcome has been open sport for months—particularly in light of two fiercely contradictory market trends: a prolonged period of low-priced gasoline and diesel fuel and the concurrent consumer shift to larger vehicles that cheap fuel has wrought.

It’s the most unfortunate of situations, but one we’ve seen before: Regulators want one thing, market forces seem to insist otherwise. The EPA even seemed to telegraph a potential for relaxation of the ultimate 54.5-mpg fleet goal when its assessment report in July indicated the current direction of consumer demand might warrant a reduction. CAFE opponents regarded the report as a mini-victory and a potential herald of further retreat when the final MTE is issued, but industry leaders we’ve queried are insistent nothing of the sort should be expected. Meanwhile, there’s a presidential election well ahead of the final ruling, so these early “optics” may meaningfully shape the next administration’s position on this economic- and environment-impacting situation.

For the auto industry itself, the lines are drawing for the 2018 MTE due date amidst the expected higher costs of the advanced technology needed to meet the next required step-up in vehicle fuel efficiency—the average price of a new vehicle so far this year is about $34,000, according to Kelly Blue Book. And a few wild cards have yet to be fully played, including the regulation’s “footprint” formula that could begin to bear more significance in future-vehicle development.

The government’s not waiting around for everybody to do the right thing. Starting in August, the National Highway Traffic Safety Admin. nearly tripled the fine for CAFE non-compliance from $5.50 for each tenth of a mile per gallon for every vehicle missing the calculated fleet requirement to to $14 for every tenth-of-an-mpg miss. In 2011, Jaguar Land Rover paid NHTSA a $14 million-plus CAFE fine, Mercedes-Benz more than $16 million.

With engineers anxious for direction and consumers doubling down on size and comfort, the most agitating takeaway from the GHG struggle might be this: At the moment, not a single conventionally-powered vehicle can meet the 2025 emissions standard. And what should we speculate about where this thing’s going when in July, Ford F-Series outsold the company’s fuel-sipping C-Max by a ratio of 35:1?

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2016-12-07
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