Gas Guzzler Sales Soar as Oil Prices Drop Amid War: Doron Levin
(Commentary. Doron Levin is a columnist for Bloomberg News.
The opinions expressed are his own.)
Southfield, Michigan, Nov. 5 (Bloomberg) -- Even with oil
prices at a two-year low, the war in Afghanistan has raised fears
of block-long lines at gas pumps should Arab oil-producers once
again tighten the taps.
That doesn't mean American drivers -- or automakers -- are
ready to give up their Chevrolet Suburbans, Dodge Rams, Ford F150
pickups or the other gas guzzlers clogging U.S. roads today.
And, with regular unleaded gasoline now averaging $1.24 a
gallon, I'm not trading in my 1994 Toyota Land Cruiser, which has
logged 113,000 miles and gets 12 miles to the gallon, for an
$18,000 Honda Civic that promises triple the fuel economy.
The pennies I'd save on fuel just wouldn't balance my costly
contribution to saving energy and the environment.
Partly as a result of cheap gas, sport utility vehicles and
other behemoths remain hugely popular. Sales of the $40,000
Chevrolet Suburban (14 miles per gallon in the city, 18 on
highways) soared more than 100 percent in October, spurred by zero-
percent financing by General Motors Corp.
U.S. automakers say that the current federal fuel-economy
rules --- combined with the availability of cheap gasoline ---have
only served to increase energy consumption and have done nothing
to lessen our dependence on foreign crude oil.
In the mid-1970s reducing dependence on imported oil became a
tenet of U.S. foreign policy, leading to what's known as the
federal corporate average fuel economy standard, or CAFE, of 27.5
miles per gallon for cars and 20.7 mpg for light trucks.
Diesel Data
The Bush administration has spoken of stiffer standards, a
move environmentalists favor and that automakers oppose.
The automakers have a point. If the government requires
expensive technologies to make vehicles ever more fuel efficient
while cheap gas is still available -- $1.05 in some parts of
Detroit -- why should I get rid of my guzzler or be motivated to
drive less?
If the nation truly is serious about reducing energy
consumption, says Loren Beard, senior manager of energy programs
for DaimlerChrysler AG, the single most effective and practical
move would be a switch to diesel engine technology.
In Europe, where gasoline costs an average $3.50 a gallon,
diesel engines now are equipped in about 40 percent of all new
passenger vehicles. Diesel costs 50 cents to $1 less than gasoline
in Europe; it's usually more expensive than unleaded gas in the
U.S.
Technology Glitches
``The fuel economy is roughly 30 to 40 percent better than a
comparable gasoline engine,'' Beard says. Diesels do cause more
pollution than gasoline engines, though researchers are still
trying to cut noxious emissions without curbing fuel economy.
Starting in 2004, General Motors intends to offer hybrid
electric motors and gasoline engines on larger pickups and sport
utilities with the aim of improving fuel economy by 15 percent.
The automaker also will offer ``displacement on demand,'' an
engine technology that allows an eight-cylinder engine to use as
few as six or four cylinders when cruising, thereby saving fuel.
In the early 1980s, General Motors had a catastrophic
experience with similar fuel-saving engines that had to be
withdrawn because of persistent glitches. ``The electronics and
actuators weren't what they are today,'' said Tanvir Ahmad, a
General Motors engineer. ``This time we are confident.''
Taxes or Tahoes?
The quickest way to reduce energy consumption, if that's the
goal, would be through higher taxes on fuel. Europe's gasoline
prices reflect an average of $3 a gallon in taxes, compared with
40 cents a gallon of state and federal taxes in the U.S.
``If a country wants to place a higher value on petroleum, it
has to place a higher value on petroleum prices,'' said Beard.
Were lawmakers to reach a consensus on raising energy taxes,
consumers might very well shift to smaller, more economical
vehicles. We might also start making fewer car trips to the market
for a quart of milk or pack of cigarettes.
For the time being, there's little chance that lawmakers will
raise gasoline taxes. They don't have the stomach for that, in my
opinion, because they know we'd punish them on election day.
Only a minority of us believe that importing less oil is
worth giving up our Tahoes and Ram pickups.
--Doron Levin in Southfield (248) 208-6985 or at
dlevin5@bloomberg.net, through the New York newsroom (212) 318-
2300 /fk |
