Commentary: Let's Wage War On Gas Guzzlers

If national security is the goal, higher fuel-economy standards are a no-brainer

Dear Mr. President,

As a self-described "war president," you have made national security the highest priority of your Administration. You have launched two wars to overthrow hostile foreign powers. Your statements about energy reflect that war footing. Last November, in urging passage of a major energy bill, you said: "America will be more prosperous and more secure when we are less dependent on foreign sources of energy."

If only your energy strategy were as forceful as your military one. In the name of national security, Americans have sacrificed their lives in Afghanistan and Iraq. But what sacrifices are you asking on the home front? If America is too reliant on foreign oil, why not ask Americans to do their part to reduce that reliance? The danger of dependence on imported oil is all too evident today, with OPEC restricting output to force the price of crude to nearly $36 a barrel -- approaching the highest prices since the invasion of Iraq.

Two-thirds of the oil in the U.S. goes for transportation fuels, mainly gasoline. Inescapably, then, improving the mileage of cars and light trucks must be part of the solution. Yet you haven't asked Congress for legislation to increase standards for corporate average fuel economy (CAFE). The standard for cars is 27.5 miles per gallon, the same as in 1985. The standard for light trucks, including sport utilities, is scheduled to bump up to 22.2 mpg by 2007 from a puny 20.7 today. Is that really the best we can do?

Your Administration's latest action on fuel economy has the potential to make matters even worse. The National Highway Traffic & Safety Administration is proposing to change the rules for light trucks and SUVs so that the heaviest ones would have the lowest mileage requirements. Environmentalists worry that the rules, if written the way Detroit wants, would give auto makers an incentive to shift the mix of vehicles they sell toward heavier gas guzzlers.

A straightforward increase in fuel economy standards under the existing framework is a better choice. Industry leaders, of course, would object. General Motors Corp. (GM ) Vice-Chairman Robert A. Lutz has joked that the standards are like fighting obesity by ordering clothing to be made in smaller sizes. But it wouldn't be all that tough to make vehicles that drink less gasoline while improving safety. Proven innovations include variable valve timing (introduced by Honda Motor Co. (HMC ) way back in 1989), direct fuel injection, and "displacement on demand," which takes some of a car's cylinders offline when they aren't needed.

A law that raises fuel-economy standards would prod auto makers to put such well-established technologies into more vehicles while boosting their incentive to develop gasoline-electric hybrids and next-generation technologies, such as fuel cells. Fuel-efficient vehicles might cost more than guzzlers. But that's what sacrifice is all about. Your chief rival for the Presidency, Senator John Kerry, isn't worried that tougher mileage standards will alienate the public. He's campaigning to raise standards to 36 mpg by 2015.

Don't stop there, Mr. President. People buy gas guzzlers because, even at today's prices, gas seems pretty cheap. If you really want to demonstrate leadership, ask Congress to raise federal fuel taxes by, say, 50 cents a gallon. Then return all the revenue that's raised to the public by cutting income taxes and giving tax credits to low-income households that don't pay income taxes. The net tax increase: zero. And what about subjecting SUVs and pickups to the guzzler tax on cars? Or ending the tax break of up to $100,000 for small-business owners who buy those hulking Hummers, Escalades, and Navigators?

Your energy plan does have some good features. They include tax credits for the purchase of hybrid vehicles, funds to help the poor weatherize their homes, and research on cleaner energy sources. But on the critical issue of gas guzzlers, it doesn't go nearly far enough. Mr. War President, you didn't flinch when you ordered U.S. troops into battle. Now show us the same decisiveness on one of the most important fronts of all -- energy security.

By Peter Coy

Before it's here, it's on the Bloomberg Terminal. LEARN MORE