Note: Fuel Economy Increase Will Not Result in more Mini Cars

Sometimes, people just know things, even if the evidence shows they're wrong. One example of this is that American conservatives know that increasing fuel economy standards will necessarily cause car companies to stop making big cars in favor of little econoboxes that will kill people. Eric Peters over at the American Prospect, in a post "CAFE Spells RIP for Trucks" says:

The government's pending (2016) 35.5 MPG CAFE fuel economy requirements -- which for the first time apply to trucks as well as passenger cars -- are going to make it very difficult for any automaker to sell trucks in volume in this country.

The problem is that's not true.

Unfortunately, there isn't a bias for more Fiat 500s

On the contrary, in 2006, when Congress was working on the new fuel economy standards [disclosure: I was staff at this time of a Senator helping to write this legislation], they wrote the law to take this concern into account. CAFE miles-per-gallon (MPG) requirements are not based on a strict one-size-fits-all manner that Peters assumes they are. Instead, automakers are assigned a fuel economy standard based on the 'footprint' of their cars. Literally: its measured by the length times the width of the car.

This footprint-based approach actually means that there is a bias in the new standards in favor of larger cars over smaller ones. A study  from the University of Michigan says "that there may be a substantial financial incentive to produce larger vehicles".

So, although Peters' concern may have been true for previous efforts to increase fuel economy standards, it isn't now.

Thoughts on the NRC Mess

This Nuclear Regulatory Commission thing sure is a mess, isn’t it?

I’m pretty confident that the NRC as a whole is going to be just fine – its not just these dysfunctional 5 people, but it is a whole bureaucracy who actually are some of the best federal workers in the government. I know several of them, and they seem to just be going about their job without regard here to fate of Jaczko.

Some people might ask, why doesn't the President just ask some people to resign? But - it doesn’t surprise me that no one will be asked to resign, because the NRC is almost a unique institution here in Washington. It actually is more like the Federal Election Commission than a government agency like the DoE. It is nominally an independent agency of the federal government, so I’m not even sure that the President could fire anyone, even if he wanted to.

It is extraordinary that this is happening publicly, but it seems like that’s a factor of Issa’s releasing the letter, not a desire to fight this in the court of public opinion.

I don’t think this will ultimately mean anything for the big fights the NRC has going on now that you mention, but it may be a symptom of those fights. If Jaczko is a proxy for the anti-nuclear crowd, and the rest of the commissioners get painted as pro-industry, as they seem to be, then it seems that there is some very big fault-lines that need to be worked-out before these decisions are made.

Finally – while it seems like the NRC is having problems – they’re nothing compared to the regulatory problems that Japanese utilities are undergoing right now. They can’t even get functioning nuclear plants back online after routine maintenance, due to public opposition and uncertain regulation. So – we can be thankful for the relative stability we’ve got here.

In which Tom Friedman agrees with Me

Tom Friedman’s column in the NY Times this weekendis about the recently announced agreement struck by the Administration and the Automakers to double auto fuel economy by 2025. I, and the rest of my colleagues at the American Security Project, agree that “This is a big deal” as Friedman writes.

In fact, I agree completely, in exactly the same words. I originally wrote, on July 28 “This is a big deal.” as part of a blog post on ASP’s Flashpoint blog when the deal was signed. This sentence, along with more analysis on how important this deal will be for national security was included in an article written by Mark Clayton in the Christian Science Monitor.

I’m pleased that Mr. Friedman agrees with our analysis: the agreement struck by the Administration and the Automakers to double auto fuel economy by 2025 is a big deal.  It is very important for American national security and foreign policy that we use less oil.

Here’s Tom Freidman:

This is a big deal — a legacy deal for Obama that will make a significant, long-term contribution to America’s energy, environmental, health and national security agendas.

Here’s my blog post:

This is a big deal.

It is very important for American national security and foreign policy that we use less oil. Last year, ASP released a report“Ending Our Dependence on Oil,” which showed how America’s addiction to oil threatens our national security.

It is important that the United States as a whole uses less oil because the sheer volume of oil imports harms American competitiveness and drives down the value of the dollar. The United States sends hundreds of billions of dollars overseas to pay for oil. The United States consumed over $1.45 trillion worth of oil in 2010, of which $680 billion was spent on imports.

Here’s the Christian Science Monitor quoting me:

Energy-security experts praised the new agreement as key to reducing America's reliance on foreign oil.

"This is a big deal," Andrew Holland, senior fellow with the American Security Project, a bipartisan public-policy and research organization, wrote on his blog. "It is important that the United States as a whole uses less oil because the sheer volume of oil imports harms American competitiveness and drives down the value of the dollar."

The US spent at least $680 billion on oil imports in 2010, he writes. Without those imports, the US trade deficit of $497 billion in 2010 "would not have existed.” He continues, “That capital could be used for investment at home, and the export of that capital had the effect of driving down the value of the dollar."

U.S.-EU Energy Council Convenes

Today, the U.S. is hosting the leadership of the EU for the U.S.-E.U. Summit.

All of the media covering this event is focusing - for good reason - on the implications for the debt crisis, as in this Reuters article: "Obama to press EU leaders over debt crisis."

Overlooked in all this, however, is that there is also a meeting of the U.S-EU Energy Council, co-hosted by Secretary Clinton and Chu. Although it may not be at the top of the headlines, a series of bureacratic reshuffling, in both the U.S. and the EU, show how important Energy policy is to both of these countries. The Lisbon Treaty fundamentally reshaped the EU governance on energy and climate issues by creating a Commissioner for Climate Policy and by giving a greater role to energy policy.

Even more recently, we have seen the creation of a Bureau of Energy Resources within the State Department, as blogged on ASP's Flashpoint by Veronique Lee.

The U.S.-EU Energy council should focus on ways to jointly develop new, cleaner technologies, as well as ways to help deploy it around the world.

'via Blog this'

Despair - can this Congress do anything?

Sometimes our political system just drives you crazy. Those of us who want to get something done on climate change, whether mitigation or adaptation, struggle to see how anything can get through. We want to do something, but we're constrained by the system we're in.

There's a temptation to say that we should just focus on adaptation, because mitigation is going to be too hard to get through. But, then something like this comes along and it kills your will on getting anything done. Even climate observation - not even climate adaptation - gets killed.

House Republicans just killed a budget neutral proposal  to institute a climate service at NOAA. It was pure adaptation - and it didn't pass. Despair.

The problem is not dependence on imported oil - its ALL oil

I see, via Real Clear Energy, that Jim Powell of the Cato Institute has an article over at Forbes, saying "Why 'Dependence' On Foreign Oil Is A Bogus Worry".

He's right that dependence on imported oil is not a problem. But, he doesn't complete his thought. It is dependence on ALL OIL that is the problem. Politicians like to blame foreign oil, but the truth is that its our dependence on oil at all that is harming both the American economy and America's national security.

So long as American businesses and consumers are completely dependent upon oil for 94% of their transportation, fluctuations in price will disproportionately affect those who need oil. This is not a commodity with easy and available substitutes.  

We're seeing it now with prices back up over $100 per barrel. This acts exactly as a tax increase: we don't have any other option. That harms our economy. Note that it is not whether the oil is imported or produced here at home: consumers are still bearing the burden.

There is a better way - we should reduce overall dependence on oil by increasing fleet fuel economy and by promoting alternatives that can break the monopoly that oil holds.

Huntsman: "we need to break oil's monopoly as a transportation fuel"

-Cross-posted from ASP's Flashpoint Blog -

Yesterday, Jon Huntsman gave a major speech on energy policy in New Hampshire. The former Governor of Utah and Ambassador China - and currently low-polling Republican Presidential candidate - laid out a vision for America's energy future. Much of it is standard Republican objectives (reducing regulations, producing more at home, etc), but I wanted to flag an important component that he brings up: "breaking oil's monopoly as a transportation fuel".

Unlike many other candidates in the Republican primaries, he is not of the "Drill, Baby, Drill" crowd, saying "we cannot simply drill our way to energy security". That is a key point to this. Even if we produced 100% of the oil we consumed, the U.S. economy would still be stuck with the global market for oil, and all the price fluctuations that go along with that.

So - to reduce that dependence, Huntsman proposes to open up we need to open up the transportation fuels market to competition. I will quote from his speech at length:

America's prosperity has always flowed from competition, and I believe it's time to let creative destruction loose in our energy sector.  Energy security, as Winston Churchill said, "lies in variety and variety alone."

Yet the current system of transportation fuels is essentially closed to competition because of gasoline's de facto monopoly for light-duty vehicles and diesel's near-monopoly for heavy-duty vehicles.

The concentration of distribution ownership is similar to the broadcast network domination in the early 1970s, which triggered market-opening FCC rules and an antitrust consent decree.

Accordingly, the Federal Trade Commission and Senate Judiciary Committee must commence an expedited review of the fuel distribution network.

Breaking oil’s monopoly will also require the repeal of regulations that prevent a truly open and fair market.

This proposal is broadly in line with a problem I identified in the ASP white paper "America's Energy Choices". Because oil is 92% of our total transportation energy, American consumers are at the mercy of broad fluctuations in the oil market. With competition, they could choose which fuel or mode of transportation offers the best combination of value, cost, and time.

This is an energy plan that is thoughtful, and Gov. Huntsman deserves credit for it. You can see the speech in full after the jump: