Tuesday, October 18, 2011

You will save money!

Just thought I'd let you know: you're going to save money. On fuel. Check it out:

Obama's Historic 54.5 mpg Fuel Efficiency Standard

That's right: automakers are going to have to increase fuel efficiency of their fleets, and that is going to save you money at the pump.  I haven't quite figured out how the increase in efficiency of cars I don't own is going to save me money, but according to the article, the agreement for model years 2012-2016 (35.5 mpg) will start saving families money at the pump this year.  Cool, huh?

These new standards will also "spur economic growth" - you know, by ... well, I'm not really sure.  Reducing income of oil companies.  Increasing income of automotive manufacturers (since you'll have to pay for all that fancy engineering to double the average fuel economy of vehicles in a decade and a half).

EPA Administrator Lisa P. Jackson said, “American consumers are calling for cleaner cars that won’t pollute their air or break their budgets at the gas pump, and our innovative American automakers are responding with plans for some of the most fuel efficient vehicles in our history.”

So, we'll have more fuel efficient (and more expensive because of all the engineering and R&D and technological advances that went into making them more efficient) vehicles, vehicles that you'll have to go out and buy (all the while taking a loss on the depreciation of the car you currently own), and will be more than making up for the savings at the pump by the increased monthly payment of your vehicle.  (Maybe this is really just a government scam to try to get GM stock up to where the gov't can sell it off and recoup the money they put into saving the company?)

Here's something else they should think about: ethanol vs. gasoline. Ethanol is not as efficient as gasoline. (Do your own research, but I'll give some links to get you started later.)  E10 (10% ethanol) is generally 3-4% less efficient than 100% gasoline, while E85 (85% ethanol) is 25-30% less efficient.  Now, recently, ethanol blends are slightly cheaper than "real" gasoline, which helps offset the reduced efficiency when looking at "cost per mile" - but this doesn't take into account the reduced efficiency from increased fueling frequency (say you're on an interstate trip - every time you stop for fuel, you're typically reducing your efficiency because of the energy spent in heating the brakes while slowing, excess energy spent to accelerate to interstate speeds vs. the amount of energy spent maintaining that speed, etc.).  However, engineering engines to run on various fuel sources, vs. optimizing for a particular fuel source, that's going to bring compromises all around.

Anyway, back to the original point: requiring increased MPG ratings for a fleet will have an effect on purchasers of the new cars only. There are somewhere north of 250 million passenger vehicles registered in the US, and of those, only 13.5% were less than two years old. So, of those 250 million vehicles, about 34 million are "new" vehicles and will get the fuel savings. And who will save? Those families that can afford to get a new car. How's that for ironic? If you can afford a new car, you will get to save money on fuel! If you can't afford a new car, you get to plod along at your old car's MPG rating, and likely losing money at the pump as the auto makers have to design to new regulations and MPG standards and take advantage of every possible trick to increase MPG, all the while "reduce dependence on foreign oil" pushes more and more ethanol out of the fuel nozzle (and into either your new car designed to run more efficiently on ethanol, or your old gas-burner that will be getting less and less MPG from the fuel that's offered to you, all the while the gov't quietly fails to tell you - other than a sticker on the pump - what you're putting into your car, and those stickers do not mention the reduced efficiency of the fuel in your designed-for-gasoline engine).

Well, that's enough encouragement for one day.  Here are some links if you want to start looking at ethanol vs. gasoline efficiency:

  • American Coalition for Ethanol fuel economy study (pdf) - note: this one may be slightly biased toward the ethanol side, based on the source :)
  • What About Ethanol MPG? Tech Tidbits (Road & Track)
  • E85 vs Gasoline Test in a Suburban -  this article notes that currently ethanol production is subsidized by the government - if unsubsidized, ethanol prices at the pump (E85) would increase by about 51 cents/gallon (this may be one reason for the price swap in the next link)
  • Nebraska Ethanol vs. Unleaded Gasoline Rack Prices - note that until recently, ethanol was significantly higher priced than gasoline (per this chart, which I've included because it goes through 2010, vs another chart I found that only goes through 2007); there are obviously many factors involved in the pricing, but government subsidization of ethanol production may be one influencing factor in ethanol's recent price falling at or below the price of gasoline - they want to make ethanol seem like a viable fuel source, so have adjusted the price to make it more consumer friendly
OK, I'm out of here... enough gloom and doom for one post!


Tony M said...

Another thought: why is this being government-mandated instead of market-driven? Unlike, say, food and drugs, this isn't something that's really going to endanger or kill someone. Well, it's going to endanger people who really WANT a high-power car, even at the cost of efficiency, "endanger" in the sense that they'll likely be forced to purchase OLD vehicles now, perhaps with less reliability or safety equipment. Just sayin'.

Ninfa said...

Nicely done Babe! :)