Just curious here: What is it the EPA and NHTSA believe they can accomplish by regulating fuel efficiency standards that the market isn’t already doing, or wouldn’t do if the economic argument made sense?
The two federal agencies estimate the first round of regulations rule will save 500 million barrels of oil over the life of trucks sold between 2014, when the rule will take effect, and 2018. Almost 250 million metric tons of greenhouse gas emissions would be cut in the same period, the agencies say. (Read more about the proposal here.)
Great, say I, but so what? Legislating fuel economy standards for truckers is like requiring bears to crap in the woods. A fleet-owner friend of mine – who is already well ahead of the EPA and NHTSA on the fuel economy numbers – can’t understand the purpose of the rule either. He’s closer to all this than I am, but we’re thinking along the same lines. Who needs a regulation to make them save money? If the ROI is there, he’s there too.
Not Like Emissions Regs
It was different with the three-tiered round of soot and NOx emissions reductions EPA foisted on the industry more than a decade ago. We knew that was going to hurt, and I guess EPA did too. They knew they wouldn’t see voluntary uptake on THOSE regs. And I’ll bet they vastly underestimated the total cost of the process – when you include breakdowns, failures, replacement costs, downtime, warranty costs, etc., along with the RD and technology validation that went into getting to 2010. We’ll all be paying for that for a long time to come, but that’s another story.
But what’s not to embrace about better fuel economy? I just can’t see why we need an expensive and burdensome regulation to force the issue.
I’m thinking this first round of reductions is just to get us primed for what’s to come. By their own estimates, the agencies figure an upcharge of about $6,000 per truck will produce savings of $74,000. When pigs fly. Were that the case, like my fleet-owner friend, we’d be all over that one. But we’re not, so that tells me the numbers are flawed from the start. But that’s a story for another day, too.
The Next Round
The cited $6,000 premium, this time, is peanuts compared to what the next round will probably cost. We’ll take this one – like we’re ready for more cost increases on heavy trucks – because the technology already exists; most of us just haven’t got around to investing yet. Given the enormity of this undertaking, and the cost of getting just this far into the process, government would have been further ahead doling out incentives to carriers to invest in this equipment themselves (read, to overcome the gap between the capital cost and the ROI of existing technology).
Here’s what I’m worried about: This first round will go by with little drama, but when Round II mandates waste-heat recovery technology, turbocompounding on turbocompounding, or whatever the OEs are working on with the money they got under the Department of Energy’s Class 8 Supertruck program, the potential $84,600 price tag (mentioned in the National Academy of Sciences report, “Technologies and Approaches to Reducing the Fuel Consumption of Medium and Heavy Duty Vehicles”) is going to look like a spit in the bucket.
In reading the clippings on this announcement, of all the parties that have come out in favor of this proposal, I don’t see too many of the proponents who will ever buy one of these new trucks. That should tell you something.
Regulations: Related News
10/28/2010 – Fuel Economy Regs: What’s the Point?
Just curious here: What is it the EPA and NHTSA believe they can accomplish by regulating fuel efficiency standards that the market isn’t already doing, or wouldn’t do if the economic argument made sense?…