Not as Simple as It Sounds: CAFE (Corporate Average Fuel Economy)

Written by Jerry Curry on February 23, 2014

Is raising the nation’s Corporate Average Fuel Economy a good idea or is it a case of government, in its zeal to accomplish something well intentioned and worthwhile for its citizens, ending up betraying the nation’s interests. We all want safer motor vehicles, cleaner air, and increased fuel economy; and certainly we all seek to build a constructive unity between mankind, wildlife and the environment. But at the same time we must ensure that while working to achieve those worthwhile objectives we don’t unwittingly trap ourselves into an agenda that in the long term turns out to be destructive of our ends.

The letters CAFE stand for Corporate Average Fuel Economy, expressed in miles per gallon (MPG). CAFE numbers are assigned to manufacturers by the National Highway Traffic Safety Administration (NHTSA). Each auto manufacturer’s fleet of production vehicles must meet or exceed those assigned numbers when all of the motor vehicles it manufactures for sale in the United States, in one year, are averaged together. Car and truck fleets are assigned separate CAFE targets.

What are the costs to America’s citizens of these chosen CAFE numbers and their side effects and consequences in so far as we can measure them? What are the impacts of these numbers on employment in the automobile and supporting industries? What are their dollars-and-cents implications? Can CAFE standards be raised substantially without incurring significant problems and costs?

If increasing CAFE numbers makes motor vehicle travel less expensive in terms of the amount of petroleum consumed and out-of-pocket costs, to get those savings would America’s citizens be willing to accept increased congestion and interference with currently successful traffic management strategies, would it result in reduced incentives for carpooling, a shift in mass transit demand and a reduced need for alternative fuels? What values guide these decisions and do we have sufficient scientific data to fully understand the problems they cause and their implications; what are the social and human costs and the total range of possibilities?

We must avoid falling into the trap of looking at the role and range of motor vehicle fuel consumption only in splendid isolation. We must know the extent of and evaluate non-economic impacts, know whether and how consumer purchase and travel options will be affected and what affects we can anticipate them having on motor vehicle traffic patterns? Most importantly, what impact will significantly increased CAFE target numbers have on saving lives on our roads and highways?

You see, raising the CAFE standard is only one idea among many. It is not conclusive in and of itself. Its major goal is moderation of petroleum consumption in the highway sector, with an important corollary being to reduce reliance on foreign oil, from the Middle East in particular. The idea is not just to set a CAFE standard, or in setting one to reach a particular level or to improve the efficiency of motor vehicle engines and transmissions.

It is not wise for the government to set the CAFE standard too high no matter how tempting that may be:

First, large fuel-improving technologies such as reducing a motor vehicle’s weight, front-wheel drive, variable speed automatic transmissions, and aerodynamic styling have already been implemented in most of the U.S. fleet and continuing application will bring only modest, incremental improvements. In the past almost all significant increases in motor vehicle fuel economy reductions, about 800 pounds, were gained by overall weight reduction. Manufacturers reach CAFE target goals through downsizing, not through the exercise of executive power or the discovery of new technology.

Second, drastic increases in CAFE standards are highly impractical if they radically curtail consumer choices. Forcing products on the public against consumer wishes is what Russian President Putin would call “centralized economic planning.”

Third, sharply higher CAFE levels will have a strong adverse impact on the makes and models built by U.S. workers and offered to the public for sale. As a result vehicle sales will fall and manufacturing employment will decay in an economy already hard-hit and in decline. Bill Underriner, Chairman of the National Auto Dealers Association, once estimated that CAFE increases, “Shuts almost seven million people out of the new car market.”

Fourth: greatly increased CAFE targets will compromise safety, as they have in the past. If a tank runs into a jeep head on, the occupants of the jeep lose.

The technical feasibility and possibility of achieving these newly adopted CAFE standards have yet to be demonstrated. To embrace them as national policy without scientific proof that they can be achieved requires a great leap of faith — or stupidity. That is why now more than ever CAFE discussions cry out for a voice of engineering and scientific reason.

President George H.W. Bush’s Chief of Staff John Sununu once wrote, “There are things the engineering profession brings to the policy-making process. We bring a sense of propriety, a sense of what is valid and not valid … A system is not valid just because it gives you the answer you want … (this) is a luxury that the engineering profession can no longer afford.”

America doesn’t have the luxury of setting an agenda that could achieve a good and highly beneficial result, but in doing so inadvertently destroys human lives or an existing good and highly beneficial activity or way of life. Now is the time for the Obama Administration to show the public that their trust and confidence in this administration has not been misplaced.

Gen. Curry was Administrator of NHTSA (1989 – 1992).

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General Jerry Ralph Curry (D.Min.) is a decorated combat veteran, Army Aviator, Paratrooper and Ranger. He enlisted in the Army as a Private and retired a Major General. For nearly forty years he and his wife Charlene have served this country both in the military and while he was a Presidential political appointee.