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September 19, 2011  |   Comments (0)   |   Post a comment

NAPT News & Views — The federal fuel economy mandate

President Obama recently announced he was ordering the creation of a new national policy that would result in less greenhouse gas pollution from medium- and heavy-duty trucks for the first time. It seems to me the linchpin of long-term success here is simple: Companies still have to meet customer demands at an affordable price.

by Mike Martin


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Federal fuel economy mandate: It’s about the customer

If there is anything we have learned over the last 30 years about federal fuel economy rules, it’s that selling the public on “saving gas” is not that easy to do.

It seems logical that everyone who drives would want more miles per gallon, especially with today’s high fuel prices. And the technology exists to achieve major increases in fuel economy, which will at least theoretically help decrease our dependence on imported oil. But we’re not a one-size-fits-all society. We all want to save gas (and money), but we also want to be mobile the way we prefer to be mobile, which is a conundrum for policymakers.

As American automakers recovered from their steep losses during the height of our seemingly endless recession, they appeared to be making a fundamental shift toward lighter, more fuel-conscious vehicles — and turning a profit doing so.

At roughly the same time, President Obama announced he was ordering the creation of a new national policy that would result in less greenhouse gas pollution from medium- and heavy-duty trucks for the first time (see the story here). It would also reduce exhaust from cars and light-duty trucks beyond the requirements he set in motion a year before. The new standards were — and are — seen by the Obama administration as critical to reducing oil consumption and cutting expenses at the pump, and the White House made it clear to auto executives that the changes were coming and they needed to cooperate.

So while American automakers, as well as their Asian rivals, once argued against even minimal increases in government fuel rules, they have now acquiesced without protest to an increase to 54.5 miles per gallon by 2025, from the current 27 miles per gallon. In fact, they support it wholeheartedly.

According to The Washington Post, some half dozen trucking industry representatives were among those at the White House for the bill signing ceremony, and one industry official commented that, “Everyone was sort of patting everyone else on the back.”

This has led to the release of the first ever federal fuel economy mandate for heavy-duty trucks and buses, including large school buses.  The U.S. Department of Transportation and EPA have identified a range of targets, with objectives that are specific to the diverse vehicle types and purposes.

Large school buses are in the category called “vocational vehicles” that will be required to reduce fuel consumption and greenhouse gas emissions by 10 percent by model year 2018. The Obama administration claims that the practical result would be an average of one gallon of fuel saved for every 100 miles traveled. I’m not the best at math, but I think that means the feds expect the average school bus to travel 36 more miles on the typical 60-gallon tank of fuel. (Assuming a typical school bus gets 7.5 miles per gallon, it can travel 450 miles on a 60-gallon tank of fuel. At fuel savings equal to one gallon for every 100 miles traveled, that means it would only take 55.5 gallons to travel 450 miles, which equates to 8.1 miles per gallon.  Multiplying 8.1 by 60 equals 486.) I think that’s very doable, but what do I know? More importantly, I wonder what you think.

Assumptions that go into the regulatory calculus are based on best guesses of market reality down the road, and that’s a risky bet right now. With so many school transportation service providers — especially school districts — struggling financially these days, it is legitimate to wonder whether they will be able to afford the new, more fuel-efficient buses when they become available. I have been around long enough to know that the estimated savings and other benefits of these new fuel economy targets may prove elusive. If that makes me a skeptic, so be it.

It seems to me the linchpin of long-term success here is simple: Companies still have to meet customer demands at an affordable price. School bus manufacturers know this all too well. The heavy truck and bus engine business is very competitive, and there’s not a manufacturer that isn’t already striving to offer better fuel economy and performance for its customers; the latest engines with improved fuel economy and less emissions are always front and center at NAPT’s annual trade show. The manufacturers have developed a breadth of alternative power choices, including expanded hybrid offerings, electric vehicles and natural gas and propane-powered vehicles.

Again, it seems to me that consumers will dictate which technologies are embraced, which are not and whether better miles per gallon is eventually achieved. I think school transportation service providers will embrace these more fuel-efficient vehicles when they arrive in showrooms, but I may be wrong. I hope not. Time will tell.

In any event, school bus engines are about to get more fuel efficient. And that’s good news.

Mike Martin is executive director of NAPT.


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