Obama Announces New Emissions and Mileage Standards

By 2016, the average car on our roads will be cleaner and more fuel-efficient.

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President Obama announced new emissions and mileage standards today, pushing the average car to 35.5 miles per gallon by 2016 - a 40 percent cleaner fleet of vehicles on our roads. The plan is based on the stricter auto standards that California has sought under federal clean air laws.

So how big of a deal is this? In today's remarks, Obama stated that the move will save 1.8 billion barrels of oil over the cars' lifetime. This is equivalent to:

  • taking 177 million cars off of the road
  • all of the oil than we imported last year from Saudi Arabia, Venezuela, Nigeria and Libya combined
  • shutting down 194 coal-fired plants
  • 5 percent of our oil consumption each year

Said Obama: "Right now the rules governing fuel economy in this country are inadequate, uncertain and in flux. ... The goal is to set one national fuel standard."

The changes are welcomed by both environmentalists and auto industry officials in what the New York Times described as nearly a win-win:

Environmental advocates and industry officials welcomed the new program, but for different reasons. Environmentalists called it a long-overdue tightening of emissions and fuel economy standards after decades of government delay and industry opposition. Auto industry officials said it would provide the single national efficiency standard they have long desired, a reasonable timetable to meet it and the certainty they need to proceed with product development plans.

Though the more fuel efficient cars will cost consumers more - an estimated $1,300 - Obama said that the driver would save over $2,800 over the life of the vehicle, and the cars would pay for themselves in fuel costs in just three years.

Said the Wall Street Journal:

That’s true—though the payback will depend on the price of gasoline. A driver trading up from an average fuel-efficient car today to a 39 miles-per-gallon car in 2016 who drives 12,000 miles a year would save about $384 a year with $3 gasoline. That would take just over 3 years to pay off the new car’s higher price.

If gas returns to $4 a gallon, the savings are bigger and the payback is quicker: $512 in gas savings over the course of a year, which means the extra price would be paid off in just two and a half years.

The new standards will bring about a small-car boom. Proclaims Jim Motavalli of the Daily Green: "The age of the SUV is over."