Leading American energy and efficiency expert, and consultant to auto companies Amory Lovins writes in Forbes:
“Auto efficiency rollbacks would threaten our national security and prosperity. As Rocky Mountain Institute’s Pentagon-cosponsored Winning the Oil Endgame showed in 2004, America’s $2-billion-a-day oil purchases incurred hidden costs—paid not at the pump but through our taxes or incomes—totaling at least $4 billion a day or $1.5 trillion a year, in three roughly equal parts: oil price volatility, OPEC’s monopoly pricing (supported by U.S. oil dependence), and the readiness costs of U.S. forces earmarked for Persian Gulf interventions.
“That last half trillion dollar a year chunk was about ten times what America was then paying for oil from the Gulf; it rivaled total U.S. defense spending at the height of the Cold War. The cost in blood was even more important: our sons and daughters have twice gone to the Gulf in 0.56-mile-per-gallon tanks and 17-feet-per-gallon-equivalent aircraft carriers because we didn’t put them in 29-mpg autos.
“The Gulf War’s $7 billion net fiscal cost to the U.S. (after other countries’ $54 billion contributions) was equivalent to just one year of a $1/bbl price increase. Yet spending less than $7 billion to buy oil efficiency instead could have eliminated all Gulf oil imports and saved many lives — assuming, as seems plausible, that the United States wouldn’t have sent a half million troops to liberate Kuwait in 1991 if Kuwait just grew broccoli.
“Mideast oil is also fearfully vulnerable to physical or cyberattack (directly or via its brittle infrastructure) on key facilities and chokepoints. This makes the whole world economy hostage to hostile neighbors or small groups of skilled fanatics.
“A prudent America would not continue to hold itself and its allies at risk of supply interruptions and price shocks by prolonging its dwindling dependence on imported oil. That is exactly what a CAFE rollback would do, undercutting the Pentagon’s mission.
“To reduce and ultimately eliminate oil’s hidden costs, the biggest lever, now as then, is auto efficiency. The auto industry measures its value in the narrowest possible way—dollars saved at the pump. Those depend on oil price, a 158-year random variable, and are also woefully incomplete.
“A more weighty and durable measure of value is (life! and) national security. The Pentagon is wisely preparing to need no oil, because it is finite, its supply and use harm public health, it is at the root of Mideast instability and the climatic threat multiplier, and it funds not just American oilfield workers but also the foreign enemies with which the Administration is most concerned.”
Efficiency Gains Will Cost Less In The Future, Not More
Lovins argues that the progress toward making efficient automobiles to date makes future efficiency gains less expensive rather than more so. “In all, the industry’s remarkable engineering skills could make autos 4 to 8 times more efficient, far simpler, more desirable — and also appealing not because they’re efficient but because they’re better.”
Turn The Engineers Loose
He concludes with this bit of insight: “So if I were leading a US automaker, and my competitors — aiming to return to the illusory comfort of weak rules, slow competitors, and undiscriminating customers — told me they’ll throw their lawyers at today’s CAFE standards, I would reply: Good luck with that, but my strategy differs. I’ll throw my engineers at those standards, and my engineers will beat your lawyers.”
The US carmakers have bought themselves a period of chaos during which rational planning for the future will be impossible. That unpredictability can do nothing but damage their bottom line and reduce their competitiveness. But they have done the same thing many times before. Some people never learn from their past mistakes.