The Car and Truck Fleet and Leasing Management Magazine

Government Oversight Committee to Investigate CAFE Standards Agreement

August 16, 2011

WASHINGTON – The chairman of the U.S. House of Representatives' Government Oversight and Reform Committee, Daryl Issa (R-CA), has sent a letter to the Obama administration challenging the legality of recently issued EPA CAFE and GHG standards.

The standards in question are those proposed for MY-2017-2025. The letter explains that the committee will begin an investigation into the process involved in creating those standards.

In the letter, Issa states, “It has come to my attention that the new Corporate Average Fuel Economy (CAFE) and EPA vehicle greenhouse gas (GHG) standards announced by President Obama and select automakers on July 29, 2011, were negotiated in secret, outside the scope of the law, and could generate significant negative impacts for consumers. Specifically, I am concerned about the lack of transparency in the process leading up to the agreement, the expected increase in cost per vehicle, and the negative impact these standards could have on the safety of automobiles.”

Issa’s letter questions the nature of the process for creating these standards, stating that consumers were left out of the process entirely. The letter goes on to cite a survey of 1,100 automotive engineers conducted by Ward’s Auto in which respondents said the standards would have a negative impact on vehicle safety.

For fleets, the key question is how the two key concerns Issa’s letter brings up, increased vehicle cost and less vehicle safety, will play out over the long run. Fuel prices are a key factor, as are the costs of adding advanced technologies that improve fuel efficiency to vehicles.

According to a report issued by the Center for Automotive Research, compliance with higher standards will cost between $4,190 and $6,435 per vehicle while only saving between $1,690 and $2,693 in fuel. Car used two prices, $3.50 per gallon and $6.00 per gallon, both in 2009 dollars. Whether these cost predictions hold true remains to be seen.

By Greg Basich

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