corporate average fuel economy for my 2017-my 2025 passenger cars and light trucks

November 2011
III. BASELINE AND ALTERNATIVES ………………………………………………...59
IV. IMPACT OF OTHER GOVERNMENTAL VEHICLE STANDARDS ON
FUEL ECONOMY ………………………………………………………………….105
V. FUEL ECONOMY ENHANCING TECHNOLOGIES AND THE VOLPE MODEL 114
VI. MANUFACTURER CAFE CAPABILITIES ………………………………………410
VII. COST AND SALES IMPACTS …………………………………………………….468
VIII. BENEFITS FROM IMPROVED FUEL ECONOMY ………………………...……605
IX. IMPACT OF WEIGHT REDUCTION ON SAFETY ……………………………...717
X. NET BENEFITS AND SENSITIVITY ANALYSIS ……………………………….734
XI. FLEXIBILITIES IN MEETING THE STANDARD ……………………………….777
XII. PROBABILISTIC UNCERTAINTY ANALYSIS …………………………………783
XIII. REGULATORY FLEXIBILITY ACT AND UNFUNDED MANDATES REFORM ACT
ANALYSIS …………………………………………………………………………823
EXECUTIVE SUMMARY
This Preliminary Regulatory Impact Analysis (PRIA) has been prepared by the National
Highway Traffic Safety Administration (NHTSA) to inform the agency‘ s consideration
of proposed Corporate Average Fuel Economy (CAFE) standards for passenger cars
and light trucks for model years (MYs) 2017 through 2025. NHTSA is required to set
CAFE standards by the Energy Policy and Conservation Act of 1975 (EPCA), as
amended by the Energy Independence and Security Act of 2007 (EISA). NHTSA does
not have discretion not to set CAFE standards each model year for passenger cars and
light trucks. CAFE standards must be set at least 18 months prior to the beginning of
the model year; must be attribute-based and defined by a mathematical function; and
must be set at the maximum feasible level that NHTSA determines manufacturers can
reach for that fleet in that model year, among other requirements. See 49 U.S.C.
3
32902 and Section IV.D of the preamble that this PRIA accompanies for more
information.
This assessment examines the costs and benefits of improving the fuel economy of
passenger cars and light trucks for MYs 2017-2025, and also the costs and benefits of
improving the fuel economy of those vehicles at alternative rates of increase (both
higher and lower) during those model years. As part of that examination, it includes a
discussion of the technologies that can improve fuel economy, analysis of the potential
impact on retail prices, safety, lifetime fuel savings and their value to consumers, and
other societal benefits such as improved energy security and reduced emissions of
pollutants and greenhouse gases. 1
As explained above, EISA requires NHTSA to set attribute-based CAFE standards that
are based on a mathematical function. The MY 2017-2025 CAFE standards for
passenger cars and light trucks are based on vehicle footprint, as were the standards for
MYs 2012-2016.2 The mathematical function or curve representing the footprint-
based standards is a constrained linear function that provides a separate fuel economy
target for each vehicle footprint, generally with more stringent targets for smaller
vehicles and less stringent targets for larger vehicles. Different parameters for the
continuous mathematical function are derived. Individual manufacturers will be
required to comply with a single fuel economy level that is based on the distribution of
its production for that year among the footprints of its vehicles. Although a
manufacturer‘ s compliance obligation is determined in the same way for both
passenger cars and light trucks, the footprint target curves for the different fleets are
established with different continuous mathematical functions that are intended to be
specific to the vehicles‘ design capabilities, to reflect the statutory requirement that the
standards are supposed to be maximum feasible for each fleet separately.
In order to evaluate the costs and benefits of the rule, a baseline prediction of the fuel
economy and mix of vehicles that would be sold in MYs 2017 to 2025 in the absence of
the proposed new standards was constructed. As was done for the MY 2012-2016 final
rule, a baseline was developed using each manufacturer‘ s MY 2008 fleet as
represented in CAFE certification data available to EPA. In order to conduct this
analysis, we assume that similar vehicles will be produced through MY 2025 and
technologies are added to this baseline fleet to determine what mpg levels could be
achieved by the manufacturers in the MYs 2017-2025 timeframe. The main analysis
includes a flat baseline, for which we assume that manufacturers would have made
no fuel economy improvements above the MY 2016 CAFE standards. In the sensitivity
analysis section, we examine an alternative baseline, for which we assume that
manufacturers would meet market demand for slightly higher fuel economy levels in
1 This analysis does not contain NHTSA‘s assessment of the potential environmental impacts of the final
rule for purposes of the National Environmental Policy Act (NEPA), 42 U.S.C. 4321-4347, which is
contained in the agency‘s Draft Environmental Impact Statement (DEIS) accompanying the proposed rule. 2 Vehicle Footprint is defined as the wheelbase (the distance from the center of the front axle to the center
of the rear axle) times the average track width (the distance between the centerline of the tires) of the
vehicle (in square feet).
4
light of higher real prices of fuel and given the new fuel economy labeling rule that was
promulgated earlier this year and would supply technologies that have a consumer
payback (defined by fuel savings exceed retail price increases) in one year or less.
NHTSA seeks comment on which of these baselines is a better prediction of what
would occur if the proposed rule were not adopted, or whether the baseline should
include a more fuel efficient mix of vehicles that incorporates all fuel economy
improvements that consumers value more than they cost.
NHTSA has examined nine alternatives, including six that are defined as annual
percentage improvements over the baseline – 2%/year, 3%/year, 4%/year, 5%/year,
6%/year, and 7%/year. In addition to those six are what NHTSA has called the
Preferred Alternative, which represents the standards that the agency is proposing
for MYs 2017-2025; the Maximum Net Benefits alternative, which Executive Orders
12866 and 13563 encourage the agency to choose unless statutory considerations
mandate otherwise; and the Total Costs Equal Total Benefits alternative. Looking at
the required mpg levels in Table 3a and 3b, the Preferred Alternative for
passenger cars would require fuel economy levels that are generally between the 3 and
4 percent annual increase alternatives, although the percentage increase varies from
year to year. The Preferred Alternative for light trucks starts at less than the 2%
alternative in MY 2017 and increases to between the 3 and 4 percent alternative in MY
2025. The Maximum Net Benefits alternative is based upon the agency‘s assessment
of the availability of technologies and a marginal cost/benefit analysis. In this case the
agency continues to include additional technologies in its analysis until the marginal cost
of adding the next technology exceeds the marginal benefit. The Maximum Net
Benefits alternative maximizes net benefits for each year for 9 consecutive years, but it
does not maximize benefits over all 9 years together. The Maximum Net Benefit for
passenger cars would require levels that are higher than the Preferred Alternative in
MYs 2017 through 2022, but then falls below the preferred alternative levels in MY
2023-25. The Maximum Net Benefit required mpg level for light trucks is higher in
every year than the levels in the Preferred Alternative. The Total Costs Equal Total
Benefits alternative represents an increase in the standard to a point where essentially
total costs of the technologies added together over the baseline added equals total benefits
over the baseline. In this analysis, for brevity, at times it is labeled TC = TB. The TC
= TB levels are higher than the Preferred alternative levels in all years.
The agency performed a variety of sensitivity analyses to examine the variability of the
CAFE model‘s results to certain economic assumptions. Sensitivity analyses were
performed on the following:
1) The price of gasoline: The main analysis uses the Reference Case AEO 2011
estimate for the price of gasoline; we study the effect of using the AEO 2011
Low and High Price Cases on the model results.
2) The rebound effect: The main analysis uses a rebound effect of 10 percent to
project increased miles traveled as the cost per mile decreases. In the
sensitivity analysis, we examine the effect of using a 5, 15, or 20 percent
rebound effect.
3) The value of CO2 benefits: The main analysis uses an initial value of $22 per
ton to quantify the benefits of reducing CO2 emissions. Sensitivity analysis
5
surrounding this assumption considers the use of alternate base values of $5,
$36, and $67. 3
4) The military security component: The main analysis does not assign a value
to the military security benefits of reducing fuel consumption. In the
sensitivity analysis, we examine the impact of using a value of 12 cents per
gallon instead.
5) Consumer benefit: The main analysis assumes there is no loss in value to
consumers resulting from vehicles that have an increase in price and higher
fuel economy. This sensitivity analysis assumes that there is a 25, or 50
percent loss in value to consumers – equivalent to the assumption that
consumers will only value the calculated benefits they will achieve at 75, or
50 percent, respectively, of the main analysis estimates.
6) ICM and RPE cost methods: The main analysis uses the ICM cost method
with an overall markup factor from variable cost to equivalent retail price of
1.2 to 1.25. The retail price equivalent (RPE) cost method results in higher
cost estimates for each of the technologies, as it uses a markup factor of 1.5.
A sensitivity analysis involving the RPE method was conducted. The agency
also performed a sensitivity analysis using the ICM method, but with NAS
estimates of technology costs.
7) Technology costs with NAS cost estimates: The agency conducted a
sensitivity analysis using values that were derived from the 2011 NAS
report. 4 This analysis used a RPE markup factor of 1.5 for non-electrification
technologies, which is consistent with the NAS estimation for technologies
manufactured by suppliers, and a RPE markup factor of 1.33 for
electrification technologies (HEV, PHEV and EV); three types of learning
which include no learning for mature technologies, 1.25 percent annual
learning for evolutionary technologies, and 2.5 percent annual learning for
revolutionary technologies; technology cost estimated for 52 percent (33 out
of 63) technologies; and technology effectiveness estimates for 56 percent (35
out of 63) of technologies. Cost learning was applied to technology costs in a
manner similar to how cost learning is applied in the central analysis for many
technologies which have base costs which are applicable to recent or near-
term future model years. As noted above, the cost learning factors used for the
sensitivity case are different than the values used in the central analysis. For
the other inputs in the sensitivity case, where the NAS study has inconsistent
information or lacks projections, NHTSA used the same inputs NHTSA used
in the central analysis.
8) Battery cost: The agency conducted a sensitivity analysis of battery costs in
relation to HEV, PHEV, and EV batteries. For HEV batteries, a sensitivity
analysis was performed with a +/- 10 percent variation in cost per kWh, while
sensitivity analyses involving PHEV and EV batteries utilized alternate ranges
contingent on the type of battery cathode (see chapter X for additional detail).
3 These values are rounded to the nearest dollar; the values used in the sensitivity analysis are unrounded.
The unrounded values are presented in Chapter X. 4 Committee on the Assessment of Technologies for Improving Light-Duty Vehicle Fuel Economy;
National Research Council. Assessment of Fuel Economy Technologies for Light-Duty Vehicles (2011).
Available at http://www.nap.edu/catalog.php?record_id=12924 (last accessed November 13, 2011)
6
PHEV and EV battery costs ranged between -20 percent and +35 percent in
this sensitivity analysis.
9) Mass reduction cost: A sensitivity analysis was performed examining the
impact of vehicle mass reduction that could feasibly be accomplished with a
+/- 40 percent impact on vehicle cost.
The agency also performed a probabilistic uncertainty analysis on the model results of the
proposed preferred alternative, as mandated by OMB Circular A-4. Over all nine MYs
(2017-2025), the higher CAFE standards will produce a net impact ranging from a net
cost of $141.4 billion to a net benefit of $703.0 billion. Across all model years, each
model year‘s passenger car fleet has, at minimum, an 89.2 percent certainty that higher
CAFE standards will produce a net benefit. For light truck fleets, this value is 98.6
percent. The uncertainty analysis is presented in detail in Chapter XII.
The MYs 2017-2025 proposed CAFE standards, like the MYs 2012-2016 CAFE
standards, are being proposed jointly with the Environmental Protection Agency (EPA),
which is concurrently proposing greenhouse gas (GHG) standards for the same vehicles
for the same model years. The joint proposal would extend the National Program
established for MYs 2012-2016 for these additional future model years. In working
together to develop the next round of standards for MYs 2017-2025, NHTSA and EPA
are building on the success of the first phase of the National Program to regulate fuel
economy and GHG emissions from U.S. light-duty vehicles, which established the strong
and coordinated standards for model years (MY) 2012-2016. As for the MYs 2012-2016
rulemaking, collaboration with California Air Resources Board (CARB) and with
industry and other stakeholders has been a key element in developing the agencies‘
proposed rules. Continuing the National Program would ensure that all manufacturers
can build a single fleet of U.S. vehicles that would satisfy all requirements under both
programs as well as under California‘s program, helping to reduce costs and regulatory
complexity while providing significant energy security and environmental benefits. The
coordinated program being proposed would achieve important reductions of fuel
consumption and GHG emissions from passenger cars and light trucks, based on
technologies that either are commercially available or that the agencies project will be
commercially available in the rulemaking timeframe and that can be incorporated at a
reasonable cost. Consistent with Executive Order 13563, this proposal was developed
with early consultation with stakeholders, employs flexible regulatory approaches to
reduce burdens, maintains freedom of choice for the public, and helps to harmonize
federal and state regulations. Because the agencies are collaborating on the National
Program, however, it is important to note throughout this analysis that there is significant
overlap in costs and benefits for NHTSA‘s CAFE program and EPA‘s GHG program,
and therefore combined program costs and benefits are not a sum of the two individual
programs.
Table 1 presents the total costs (technology and social), benefits, and net benefits for
NHTSA‘s proposed CAFE levels by alternative. The values in Table 1 display the total
costs for all MY 2017-2025 vehicles and the benefits and net benefits represent the
impacts of the standards over the full lifetimes of the vehicles projected to be sold during
model years 2017 – 2025.
Table 1
NHTSA‘s Estimated 2017-2025 Model Year Costs, Benefits, and Net Benefits 5 under the
Preferred Alternative CAFE Standards
(Billions of 2009 Dollars)
Net Benefits $255.4
Table 2 shows the overall analysis summary of costs, benefits, and net benefits for the
nine model years by alternative for the combined light duty fleet. Table 4 shows the
agency‘ s projection of the estimated actual harmonic average that would be achieved
by the manufacturers, assuming that some manufacturers will pay fines rather than meet
the required levels. Table 3 shows the estimated required levels. All of the tables in
this analysis compare the flat MY 2016 baseline to the projected achieved harmonic
average. Additionally all of the tables in the Executive Summary and in the analysis as
a whole use the central value for the Social Cost of Carbon (SCC), which is the average
SCC across models at the 3 percent discount rate. The SCC is discussed in more detail
in Chapter VIII. For purposes of capturing the uncertainties involved in regulatory
impact analysis, we emphasize the importance and value of considering the full range of
SCC values.
Costs: Costs were estimated based on the specific technologies that were applied to
improve each manufacturer‘ s fuel economy up to their achieved level under each
alternative or fines that would be assessed. Table 5 provides the cost and fine estimates
on an average per-vehicle basis, and Table 6 provides those estimates (including social
costs and excluding fines) on a fleet-wide basis in millions of dollars.
Benefits: Benefits are determined mainly from fuel savings over the lifetime of the
vehicle, but also include externalities such as reductions in criteria pollutants. The
agency uses a 3 percent and 7 percent discount rate to value intra-generational future
benefits and costs. Inter-generational6 benefits from future carbon dioxide reductions
are discounted at 3 percent in the main analysis, even when intra-generational benefits
5 In Table 1, and throughout this regulatory impact analysis, discounting is applied to all costs and benefits
with the exception of technology costs. 6 Inter-generational benefits, which include reductions in the expected future economic damages caused by
increased global temperatures, a rise in sea levels, and other projected impacts of climate change, are
anticipated to extend over a period from approximately fifty to two hundred or more years in the future, and
will thus be experienced primarily by generations that are not now living.
8
are discounted at 7 percent. Sensitivity analyses in Chapter X consider other inter-
generational discount rates that accompany alternative estimates of the social cost of
carbon. Table 7 provides those estimates on an industry-wide basis at a 3 percent
discount rate and Table 10 provides the estimates at a 7 percent discount rate.
Net Benefits: Tables 8 and 11 compare total net benefits of each alternative at the 3
percent and 7 percent discount rates, respectively.
Fuel Savings: Tables 12a through 12c show the lifetime fuel savings in millions of
gallons.
Change in Electricity Consumption: Tables 12d through 12f show the lifetime net
change in electrical consumption, in gigawatt-hours.
9
Passenger Cars and Light Trucks
MY 2017-2025 Combined
2% Annual Increase $88,020 $335,246 $247,227
3% Annual Increase $149,653 $492,767 $343,114
4% Annual Increase $229,057 $622,223 $393,166
5% Annual Increase $321,534 $738,940 $417,406
6% Annual Increase $398,370 $812,452 $414,082
7% Annual Increase $441,397 $865,036 $423,639
Max Net Benefits $280,743 $680,178 $399,436
Total Cost = Total Benefit $346,613 $768,632 $422,019
7% Discount Rate
2% Annual Increase $82,201 $272,101 $189,900
3% Annual Increase $141,196 $399,948 $258,751
4% Annual Increase $218,471 $504,750 $286,279
5% Annual Increase $308,881 $599,605 $290,725
6% Annual Increase $384,088 $659,091 $275,003
7% Annual Increase $426,176 $701,740 $275,565
Max Net Benefits $238,380 $513,724 $275,344
Total Cost = Total Benefit $325,725 $616,689 $290,964
10
Alternative CAFE Levels
Estimated Required Average for the Passenger Car Fleet, in mpg 7
Alternative
MY
2017
MY
2018
MY
2019
MY
2020
MY
2021
2% Annual Increase 39.4 40.2 41.1 41.9 42.8
3% Annual Increase 39.8 41.1 42.4 43.7 45.1
4% Annual Increase 40.2 41.9 43.7 45.6 47.5
5% Annual Increase 40.6 42.8 45.2 47.6 50.2
6% Annual Increase 41.1 43.8 46.7 49.7 53.0
7% Annual Increase 41.5 44.8 48.2 51.9 56.0
Max Net Benefits (3% Discount Rate) 43.6 45.7 46.9 48.1 48.6
Total Cost = Total Benefit (3% Discount
Rate) 44.8 46.7 48.1 49.6 50.7
Rate) 44.8 46.7 48.1 49.6 50.7
Alternative MY
2022 MY
2023 MY
2024 MY
2% Annual Increase 43.7 44.6 45.5 46.5
3% Annual Increase 46.5 48.0 49.5 51.1
4% Annual Increase 49.6 51.7 53.9 56.3
5% Annual Increase 52.9 55.8 58.8 62.0
6% Annual Increase 56.5 60.2 64.2 68.5
7% Annual Increase 60.4 65.1 70.2 75.7
Max Net Benefits (3% Discount Rate) 48.9 49.4 50.2 50.7
Total Cost = Total Benefit (3% Discount Rate) 53.1 55.0 57.1 58.6
7 The choice of a 3 or 7 percent discount rate can impact the results of the Max Net Benefits and Total Cost
= Total Benefits scenarios. The results of all other scenarios are not impacted by choice of discount rate.
Results for both 3 and 7 percent discount rates are therefore presented for both Max Net Benefits and Total
Cost = Total Benefit scenarios.
Estimated Required Average for the Light Truck Fleet, in mpg
Alternative
MY
2017
MY
2018
MY
2019
MY
2020
MY
2021
2% Annual Increase 30.1 30.8 31.6 32.1 32.8
3% Annual Increase 30.4 31.5 32.6 33.5 34.6
4% Annual Increase 30.6 32.1 33.6 35.0 36.5
5% Annual Increase 30.9 32.8 34.7 36.5 38.5
6% Annual Increase 31.3 33.5 35.8 38.1 40.7
7% Annual Increase 31.6 34.2 37.0 39.8 43.0
Rate) 34.2 36.0 37.9 39.2 40.5
Rate) 34.3 36.0 37.9 39.2 40.5
Alternative MY
2022 MY
2023 MY
2024 MY
2% Annual Increase 33.5 34.3 35.1 35.8
3% Annual Increase 35.7 36.9 38.2 39.4
4% Annual Increase 38.1 39.8 41.6 43.4
5% Annual Increase 40.6 42.9 45.4 47.9
6% Annual Increase 43.4 46.3 49.5 52.8
7% Annual Increase 46.4 50.1 54.2 58.4
12
Alternative
MY
2017
MY
2018
MY
2019
MY
2020
MY
2021
2% Annual Increase 35.4 36.2 37.1 37.9 38.7
3% Annual Increase 35.7 37.0 38.2 39.5 40.8
4% Annual Increase 36.1 37.7 39.4 41.2 43.0
5% Annual Increase 36.4 38.5 40.7 43.0 45.4
6% Annual Increase 36.8 39.4 42.1 44.9 47.9
7% Annual Increase 37.2 40.3 43.5 46.9 50.6
Rate) 40.2 42.1 43.9 45.4 46.6
Rate) 40.3 42.1 43.9 45.4 46.6
Alternative MY
2022 MY
2023 MY
2024 MY
2% Annual Increase 39.5 40.4 41.4 42.3
3% Annual Increase 42.1 43.5 45.0 46.5
4% Annual Increase 44.9 46.9 49.1 51.2
5% Annual Increase 47.9 50.6 53.5 56.5
6% Annual Increase 51.1 54.6 58.4 62.4
7% Annual Increase 54.6 59.0 63.8 69.0
13
Estimated Required Preferred Alternative CAFE Levels
Projected Required Average for the Fleet, in gallons per 100 miles
MY
2017
MY
2018
MY
2019
MY
2020
MY
2021
Combined 2.8325 2.7462 2.6644 2.5791 2.4452
MY
Combined 2.3319 2.2218 2.1148 2.0161
14
Projected Achieved Harmonic Average for the Passenger Car Fleet, in mpg 8
Alternative
MY
2017
MY
2018
MY
2019
MY
2020
MY
2021
2% Annual Increase 38.1 39.4 40.6 41.8 42.7
3% Annual Increase 38.5 40.3 42.0 43.7 44.9
4% Annual Increase 39.1 41.1 43.2 45.4 46.8
5% Annual Increase 39.8 42.1 44.4 46.9 49.1
6% Annual Increase 40.5 43.0 45.4 48.4 50.1
7% Annual Increase 40.9 43.6 46.1 49.2 50.6
Rate) 42.1 43.7 45.3 46.9 48.7
Rate) 42.1 43.7 45.3 46.8 48.6
Alternative MY
2022 MY
2023 MY
2024 MY
2% Annual Increase 43.3 43.8 44.5 45.1
3% Annual Increase 45.9 46.7 47.8 49.2
4% Annual Increase 47.8 49.0 51.0 52.8
5% Annual Increase 50.1 51.7 55.2 57.5
6% Annual Increase 51.2 53.2 57.9 61.0
7% Annual Increase 52.4 55.4 59.6 62.9
Projected Achieved Harmonic Average for the Light Truck Fleet, in mpg
Alternative MY
2017 MY
2018 MY
2019 MY
2020 MY
2% Annual Increase 29.4 30.3 31.7 32.4 33.4
3% Annual Increase 29.7 31.1 32.7 33.9 35.3
4% Annual Increase 30.2 31.8 33.9 35.4 37.2
5% Annual Increase 30.7 32.4 34.7 36.6 38.7
6% Annual Increase 31.3 33.1 35.8 37.9 39.5
7% Annual Increase 31.6 33.5 36.2 38.3 39.7
Rate) 32.5 33.7 35.6 37.2 39.0
Rate) 32.6 33.7 35.6 37.2 39.0
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
2% Annual Increase 33.7 34.2 34.7 35.0
3% Annual Increase 36.1 36.6 37.5 38.4
4% Annual Increase 38.2 39.3 40.2 41.6
5% Annual Increase 39.8 40.9 42.8 44.4
6% Annual Increase 40.6 41.8 43.5 45.3
7% Annual Increase 41.4 42.8 44.9 46.0
16
Projected Achieved Harmonic Average for the Combined Fleet, in mpg
Alternative
MY
2017
MY
2018
MY
2019
MY
2020
MY
2021
2% Annual Increase 34.4 35.5 36.9 37.9 38.9
3% Annual Increase 34.7 36.4 38.2 39.7 41.0
4% Annual Increase 35.3 37.1 39.3 41.3 42.9
5% Annual Increase 35.9 38.0 40.4 42.6 44.8
6% Annual Increase 36.5 38.8 41.4 44.1 45.8
7% Annual Increase 36.9 39.3 42.0 44.7 46.1
Rate) 38.0 39.5 41.3 42.9 44.8
Rate) 38.0 39.5 41.3 42.9 44.8
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
2% Annual Increase 39.4 40.0 40.7 41.2
3% Annual Increase 41.9 42.7 43.7 45.0
4% Annual Increase 44.0 45.2 46.8 48.5
5% Annual Increase 46.0 47.4 50.3 52.4
6% Annual Increase 46.9 48.7 52.1 54.7
7% Annual Increase 47.9 50.3 53.7 56.1
17
Preferred Alternative CAFE Levels
Projected Achieved Harmonic Average for the Fleet, in gallons per 100 miles
MY
2017
MY
2018
MY
2019
MY
2020
MY
2021
Combined 2.8991 2.7770 2.6306 2.5218 2.4179
MY
2022
MY
2023
MY
2024
MY
2025
Combined 2.3599 2.2897 2.2111 2.1256
18
Passenger Cars (2009 Dollars)
2% Annual Increase $60 $155 $257 $353 $431
3% Annual Increase $103 $270 $438 $622 $778
4% Annual Increase $216 $447 $683 $961 $1,175
5% Annual Increase $378 $682 $939 $1,278 $1,719
6% Annual Increase $549 $940 $1,243 $1,708 $2,034
7% Annual Increase $637 $1,086 $1,409 $1,926 $2,243
Max Net Benefits (3% Discount Rate) $684 $837 $1,166 $1,274 $1,346
Rate) $873 $1,090 $1,243 $1,405 $1,638
Rate) $873 $1,090 $1,237 $1,402 $1,632
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
2% Annual Increase $502 $552 $642 $693
3% Annual Increase $894 $1,010 $1,159 $1,343
4% Annual Increase $1,323 $1,568 $1,950 $2,101
5% Annual Increase $1,928 $2,241 $3,117 $3,103
6% Annual Increase $2,373 $2,897 $4,207 $4,086
7% Annual Increase $2,757 $3,691 $4,813 $4,746
Max Net Benefits (3% Discount Rate) $1,355 $1,408 $1,463 $1,433
Total Cost = Total Benefit (3% Discount Rate) $2,049 $2,490 $2,847 $2,722
Light Trucks (2009 Dollars)
2% Annual Increase $117 $210 $325 $403 $480
3% Annual Increase $190 $336 $487 $681 $871
4% Annual Increase $319 $536 $846 $1,203 $1,524
5% Annual Increase $473 $790 $1,188 $1,663 $2,124
6% Annual Increase $740 $1,150 $1,625 $2,225 $2,540
7% Annual Increase $903 $1,309 $1,771 $2,382 $2,646
Max Net Benefits (3% Discount Rate) $1,307 $1,475 $1,686 $2,056 $2,319
Max Net Benefits (7% Discount Rate) $1,057 $1,220 $1,449 $1,640 $1,891
Rate) $1,305 $1,481 $1,689 $2,051 $2,329
Rate) $1,315 $1,485 $1,694 $2,055 $2,322
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
2% Annual Increase $517 $573 $636 $661
3% Annual Increase $982 $1,069 $1,202 $1,344
4% Annual Increase $1,690 $1,953 $2,109 $2,356
5% Annual Increase $2,353 $2,653 $3,314 $3,467
6% Annual Increase $2,832 $3,250 $3,854 $4,048
7% Annual Increase $3,267 $3,743 $4,525 $4,450
20
Combined (2009 Dollars)
2% Annual Increase $81 $175 $281 $371 $448
3% Annual Increase $135 $294 $456 $643 $810
4% Annual Increase $254 $479 $741 $1,046 $1,297
5% Annual Increase $413 $722 $1,028 $1,414 $1,862
6% Annual Increase $619 $1,016 $1,380 $1,890 $2,212
7% Annual Increase $735 $1,167 $1,539 $2,087 $2,384
Max Net Benefits (3% Discount Rate) $913 $1,070 $1,352 $1,550 $1,688
Rate) $1,032 $1,232 $1,403 $1,633 $1,880
Rate) $1,036 $1,234 $1,401 $1,632 $1,874
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
2% Annual Increase $507 $559 $640 $683
3% Annual Increase $925 $1,030 $1,173 $1,344
4% Annual Increase $1,451 $1,699 $2,003 $2,186
5% Annual Increase $2,075 $2,381 $3,183 $3,223
6% Annual Increase $2,533 $3,018 $4,089 $4,073
7% Annual Increase $2,934 $3,709 $4,716 $4,648
21
, by Alternative
(Millions of 2009 Dollars)
2% Annual Increase $903 $2,175 $3,631 $5,074 $6,270
3% Annual Increase $1,501 $3,656 $5,944 $8,496 $10,641
4% Annual Increase $2,869 $5,658 $8,722 $12,378 $15,189
5% Annual Increase $4,765 $8,300 $11,645 $15,996 $21,485
6% Annual Increase $6,720 $11,114 $14,888 $20,745 $24,643
7% Annual Increase $7,778 $12,706 $16,630 $22,949 $26,114
Max Net Benefits $8,242 $9,939 $13,837 $15,679 $17,108
Total Cost = Total Benefit $10,185 $12,707 $14,531 $16,900 $20,081
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $7,381 $8,270 $9,772 $10,932 $54,407
3% Annual Increase $12,407 $14,188 $16,599 $19,728 $93,159
4% Annual Increase $17,338 $20,728 $26,183 $29,272 $138,337
5% Annual Increase $24,264 $28,598 $40,437 $42,329 $197,819
6% Annual Increase $28,631 $35,382 $54,306 $55,339 $251,768
7% Annual Increase $31,378 $43,568 $59,906 $61,921 $282,950
Max Net Benefits $17,716 $18,916 $20,233 $20,848 $142,517
10
Societal perspective includes technology costs and societal costs, but does not include payment of civil
penalties by manufacturers in lieu of compliance with the CAFE standards.
22
Light Trucks, 3% Discount Rate
2% Annual Increase $965 $1,707 $2,741 $3,385 $4,148
3% Annual Increase $1,527 $2,666 $3,950 $5,380 $6,897
4% Annual Increase $2,464 $4,022 $6,265 $8,680 $11,053
5% Annual Increase $3,510 $5,650 $8,366 $11,507 $14,798
6% Annual Increase $5,270 $7,906 $11,081 $14,955 $17,276
7% Annual Increase $6,298 $8,888 $11,960 $15,852 $17,533
Max Net Benefits $8,777 $9,847 $11,314 $13,683 $15,633
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $4,510 $4,962 $5,466 $5,727 $33,612
3% Annual Increase $7,791 $8,407 $9,363 $10,512 $56,494
4% Annual Increase $12,318 $14,014 $15,053 $16,852 $90,720
5% Annual Increase $16,419 $18,008 $22,139 $23,318 $123,714
6% Annual Increase $19,048 $21,252 $24,302 $25,513 $146,602
7% Annual Increase $20,706 $23,318 $27,363 $26,529 $158,447
Max Net Benefits $16,360 $18,460 $21,140 $23,012 $138,225
23
Combined, 3% Discount Rate
2% Annual Increase $1,868 $3,883 $6,372 $8,459 $10,418
3% Annual Increase $3,028 $6,322 $9,894 $13,875 $17,538
4% Annual Increase $5,332 $9,680 $14,987 $21,058 $26,242
5% Annual Increase $8,275 $13,949 $20,012 $27,502 $36,284
6% Annual Increase $11,990 $19,020 $25,969 $35,699 $41,919
7% Annual Increase $14,076 $21,594 $28,590 $38,801 $43,647
Max Net Benefits $17,019 $19,786 $25,151 $29,362 $32,741
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $11,891 $13,233 $15,238 $16,659 $88,020
3% Annual Increase $20,199 $22,595 $25,962 $30,240 $149,653
4% Annual Increase $29,657 $34,743 $41,235 $46,123 $229,057
5% Annual Increase $40,683 $46,606 $62,576 $65,647 $321,534
6% Annual Increase $47,679 $56,634 $78,608 $80,852 $398,370
7% Annual Increase $52,084 $66,887 $87,269 $88,450 $441,397
Max Net Benefits $34,076 $37,376 $41,373 $43,860 $280,743
24
, by Alternative
2% Annual Increase $3,622 $7,262 $11,776 $16,236 $20,143
3% Annual Increase $5,598 $11,552 $18,161 $24,751 $30,143
4% Annual Increase $8,455 $15,431 $23,139 $31,481 $37,386
5% Annual Increase $11,534 $19,215 $27,671 $36,976 $44,980
6% Annual Increase $14,548 $22,794 $31,282 $41,881 $48,717
7% Annual Increase $16,797 $25,535 $34,187 $44,924 $50,687
Max Net Benefits $18,546 $21,999 $28,842 $33,951 $38,758
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $23,604 $26,497 $30,911 $34,501 $174,553
3% Annual Increase $34,857 $39,406 $45,496 $52,720 $262,683
4% Annual Increase $42,556 $48,624 $57,757 $66,009 $330,837
5% Annual Increase $50,012 $57,048 $71,273 $80,929 $399,638
6% Annual Increase $54,124 $62,710 $80,526 $92,493 $449,074
7% Annual Increase $58,268 $70,271 $85,920 $98,104 $484,693
Max Net Benefits $41,099 $44,553 $48,402 $52,662 $328,812
11
These benefits are considered from a societal perspective because they include externalities. They are
distinguished from a consumer perspective, because consumers generally would not think about the value
of carbon dioxide, energy security, etc.
25
Light Trucks, (3% Discount Rate)
2% Annual Increase $4,051 $7,459 $12,945 $15,888 $20,031
3% Annual Increase $6,022 $11,100 $17,537 $22,627 $28,308
4% Annual Increase $8,732 $14,377 $22,226 $28,652 $35,476
5% Annual Increase $10,894 $17,210 $25,370 $32,751 $41,140
6% Annual Increase $13,815 $19,716 $28,961 $37,255 $43,344
7% Annual Increase $15,023 $21,118 $30,523 $38,472 $43,510
Max Net Benefits $19,388 $22,289 $28,681 $34,513 $41,336
Alternative MY
2022 MY
2023 MY
2024 MY
2025 9-Year
2% Annual Increase $21,938 $24,108 $26,288 $27,986 $160,694
3% Annual Increase $31,730 $34,024 $37,551 $41,185 $230,084
4% Annual Increase $39,695 $43,420 $46,721 $52,086 $291,385
5% Annual Increase $45,536 $49,305 $55,738 $61,358 $339,302
6% Annual Increase $47,477 $51,776 $57,416 $63,617 $363,378
7% Annual Increase $49,951 $54,628 $61,530 $65,588 $380,343
Max Net Benefits $44,002 $48,274 $53,343 $59,539 $351,366
26
Combined, (3% Discount Rate)
2% Annual Increase $7,674 $14,721 $24,721 $32,124 $40,175
3% Annual Increase $11,621 $22,652 $35,698 $47,378 $58,450
4% Annual Increase $17,188 $29,808 $45,365 $60,132 $72,862
5% Annual Increase $22,429 $36,424 $53,041 $69,727 $86,120
6% Annual Increase $28,363 $42,511 $60,243 $79,135 $92,061
7% Annual Increase $31,821 $46,653 $64,710 $83,396 $94,197
Max Net Benefits $37,934 $44,288 $57,523 $68,464 $80,094
Alternative MY
2022 MY
2023 MY
2024 MY
2025 9-Year
2% Annual Increase $45,542 $50,604 $57,199 $62,487 $335,246
3% Annual Increase $66,587 $73,430 $83,047 $93,905 $492,767
4% Annual Increase $82,251 $92,044 $104,478 $118,095 $622,223
5% Annual Increase $95,548 $106,353 $127,011 $142,287 $738,940
6% Annual Increase $101,601 $114,486 $137,942 $156,109 $812,452
7% Annual Increase $108,219 $124,898 $147,451 $163,692 $865,036
Max Net Benefits $85,101 $92,827 $101,746 $112,202 $680,178
27
by Alternative
2% Annual Increase $2,719 $5,087 $8,145 $11,163 $13,874
3% Annual Increase $4,097 $7,896 $12,217 $16,255 $19,502
4% Annual Increase $5,587 $9,772 $14,417 $19,103 $22,197
5% Annual Increase $6,770 $10,915 $16,026 $20,981 $23,494
6% Annual Increase $7,828 $11,680 $16,394 $21,136 $24,074
7% Annual Increase $9,019 $12,829 $17,557 $21,975 $24,573
Max Net Benefits $10,304 $12,060 $15,005 $18,272 $21,650
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $16,223 $18,226 $21,139 $23,570 $120,145
3% Annual Increase $22,450 $25,217 $28,897 $32,992 $169,524
4% Annual Increase $25,218 $27,896 $31,575 $36,737 $192,501
5% Annual Increase $25,748 $28,449 $30,836 $38,600 $201,819
6% Annual Increase $25,493 $27,328 $26,220 $37,154 $197,306
7% Annual Increase $26,890 $26,702 $26,014 $36,183 $201,743
Max Net Benefits $23,383 $25,636 $28,169 $31,815 $186,295
12
This table is from a societal perspective, thus, civil penalties are deleted from the costs because they are a
transfer payment (from manufacturers to the U.S. Treasury).
28
2% Annual Increase $3,087 $5,752 $10,204 $12,503 $15,883
3% Annual Increase $4,495 $8,434 $13,587 $17,247 $21,411
4% Annual Increase $6,269 $10,355 $15,961 $19,972 $24,424
5% Annual Increase $7,384 $11,560 $17,004 $21,244 $26,342
6% Annual Increase $8,545 $11,810 $17,880 $22,300 $26,068
7% Annual Increase $8,725 $12,230 $18,563 $22,620 $25,977
Max Net Benefits $10,611 $12,442 $17,367 $20,830 $25,703
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $17,428 $19,145 $20,822 $22,258 $127,082
3% Annual Increase $23,939 $25,617 $28,188 $30,672 $173,590
4% Annual Increase $27,376 $29,406 $31,668 $35,235 $200,665
5% Annual Increase $29,117 $31,297 $33,599 $38,041 $215,587
6% Annual Increase $28,430 $30,524 $33,114 $38,103 $216,776
7% Annual Increase $29,245 $31,309 $34,167 $39,060 $221,896
Max Net Benefits $27,642 $29,815 $32,204 $36,527 $213,141
29
2% Annual Increase $5,806 $10,838 $18,349 $23,666 $29,757
3% Annual Increase $8,592 $16,330 $25,803 $33,503 $40,913
4% Annual Increase $11,855 $20,128 $30,378 $39,075 $46,620
5% Annual Increase $14,154 $22,475 $33,030 $42,225 $49,836
6% Annual Increase $16,373 $23,491 $34,274 $43,436 $50,142
7% Annual Increase $17,744 $25,059 $36,120 $44,595 $50,550
Max Net Benefits $20,915 $24,502 $32,372 $39,103 $47,353
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $33,651 $37,371 $41,961 $45,828 $247,227
3% Annual Increase $46,388 $50,835 $57,085 $63,665 $343,114
4% Annual Increase $52,594 $57,301 $63,243 $71,972 $393,166
5% Annual Increase $54,865 $59,746 $64,435 $76,640 $417,406
6% Annual Increase $53,922 $57,852 $59,334 $75,257 $414,082
7% Annual Increase $56,135 $58,012 $60,181 $75,242 $423,639
Max Net Benefits $51,025 $55,451 $60,373 $68,342 $399,436
30
, by Alternative
2% Annual Increase $832 $2,033 $3,400 $4,760 $5,884
3% Annual Increase $1,390 $3,431 $5,593 $8,024 $10,072
4% Annual Increase $2,704 $5,365 $8,281 $11,786 $14,489
5% Annual Increase $4,537 $7,932 $11,118 $15,300 $20,627
6% Annual Increase $6,438 $10,673 $14,283 $19,946 $23,726
7% Annual Increase $7,456 $12,220 $15,980 $22,103 $25,166
Max Net Benefits $7,808 $9,439 $13,194 $14,978 $16,298
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $6,932 $7,769 $9,191 $10,283 $51,083
3% Annual Increase $11,754 $13,454 $15,756 $18,751 $88,226
4% Annual Increase $16,546 $19,831 $25,123 $28,054 $132,178
5% Annual Increase $23,316 $27,525 $39,107 $40,819 $190,281
6% Annual Increase $27,612 $34,198 $52,730 $53,485 $243,091
7% Annual Increase $30,293 $42,227 $58,185 $59,894 $273,523
Max Net Benefits $16,873 $17,824 $19,262 $19,898 $135,574
13
Societal perspective includes technology costs and societal costs, but does not include civil penalties.
31
Light Trucks, 7% Discount Rate
2% Annual Increase $900 $1,589 $2,535 $3,135 $3,835
3% Annual Increase $1,432 $2,492 $3,674 $5,028 $6,460
4% Annual Increase $2,327 $3,797 $5,918 $8,240 $10,510
5% Annual Increase $3,339 $5,381 $7,971 $11,005 $14,174
6% Annual Increase $5,053 $7,582 $10,615 $14,373 $16,601
7% Annual Increase $6,062 $8,542 $11,472 $15,248 $16,853
Max Net Benefits $6,996 $7,931 $9,457 $10,754 $12,590
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $4,170 $4,591 $5,063 $5,301 $31,119
3% Annual Increase $7,305 $7,889 $8,797 $9,892 $52,970
4% Annual Increase $11,716 $13,357 $14,352 $16,076 $86,292
5% Annual Increase $15,733 $17,269 $21,314 $22,414 $118,599
6% Annual Increase $18,310 $20,457 $23,437 $24,572 $140,998
7% Annual Increase $19,956 $22,500 $26,455 $25,565 $152,653
Max Net Benefits $12,973 $13,703 $14,377 $14,024 $102,806
32
Combined, 7% Discount Rate
2% Annual Increase $1,731 $3,622 $5,935 $7,895 $9,719
3% Annual Increase $2,822 $5,923 $9,267 $13,053 $16,533
4% Annual Increase $5,031 $9,162 $14,199 $20,026 $24,999
5% Annual Increase $7,876 $13,313 $19,089 $26,305 $34,801
6% Annual Increase $11,491 $18,255 $24,898 $34,319 $40,327
7% Annual Increase $13,518 $20,762 $27,452 $37,351 $42,019
Max Net Benefits $14,804 $17,369 $22,651 $25,732 $28,888
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $11,101 $12,360 $14,253 $15,584 $82,201
3% Annual Increase $19,060 $21,343 $24,552 $28,643 $141,196
4% Annual Increase $28,262 $33,188 $39,474 $44,130 $218,471
5% Annual Increase $39,049 $44,795 $60,420 $63,233 $308,881
6% Annual Increase $45,921 $54,654 $76,166 $78,057 $384,088
7% Annual Increase $50,249 $64,726 $84,640 $85,458 $426,176
Max Net Benefits $29,846 $31,527 $33,639 $33,923 $238,380
33
, by Alternative
2% Annual Increase $2,953 $5,923 $9,622 $13,265 $16,475
3% Annual Increase $4,570 $9,429 $14,843 $20,227 $24,656
4% Annual Increase $6,894 $12,580 $18,901 $25,714 $30,562
5% Annual Increase $9,402 $15,660 $22,593 $30,195 $36,764
6% Annual Increase $11,860 $18,576 $25,531 $34,194 $39,820
7% Annual Increase $13,694 $20,822 $27,918 $36,693 $41,439
Max Net Benefits $14,994 $17,744 $23,379 $27,656 $31,492
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $19,329 $21,712 $25,357 $28,327 $142,964
3% Annual Increase $28,538 $32,287 $37,316 $43,271 $215,136
4% Annual Increase $34,828 $39,799 $47,324 $54,135 $270,737
5% Annual Increase $40,916 $46,723 $58,396 $66,356 $327,006
6% Annual Increase $44,287 $51,320 $65,945 $75,812 $367,345
7% Annual Increase $47,683 $57,520 $70,373 $80,417 $396,559
Max Net Benefits $33,410 $35,960 $39,361 $42,961 $266,956
14
These benefits are considered from a societal perspective because they include externalities. They are
distinguished from a consumer perspective, because consumers generally would not think about the value
of carbon dioxide, energy security, etc.
34
2% Annual Increase $3,238 $5,971 $10,366 $12,741 $16,080
3% Annual Increase $4,815 $8,896 $14,042 $18,150 $22,711
4% Annual Increase $6,980 $11,515 $17,798 $22,990 $28,464
5% Annual Increase $8,709 $13,782 $20,310 $26,277 $33,041
6% Annual Increase $11,042 $15,767 $23,168 $29,874 $34,786
7% Annual Increase $12,007 $16,890 $24,408 $30,838 $34,884
Max Net Benefits $13,347 $15,816 $21,135 $24,755 $30,508
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $17,637 $19,402 $21,156 $22,545 $129,137
3% Annual Increase $25,485 $27,351 $30,211 $33,151 $184,812
4% Annual Increase $31,881 $34,892 $37,579 $41,915 $234,013
5% Annual Increase $36,607 $39,649 $44,843 $49,381 $272,599
6% Annual Increase $38,138 $41,611 $46,181 $51,179 $291,746
7% Annual Increase $40,090 $43,864 $49,458 $52,742 $305,181
Max Net Benefits $32,429 $34,672 $36,381 $37,726 $246,768
35
2% Annual Increase $6,192 $11,895 $19,988 $26,006 $32,555
3% Annual Increase $9,384 $18,325 $28,885 $38,377 $47,367
4% Annual Increase $13,874 $24,095 $36,699 $48,703 $59,027
5% Annual Increase $18,110 $29,442 $42,904 $56,471 $69,806
6% Annual Increase $22,902 $34,344 $48,698 $64,067 $74,606
7% Annual Increase $25,701 $37,712 $52,326 $67,531 $76,323
Max Net Benefits $28,342 $33,559 $44,513 $52,411 $62,000
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $36,965 $41,114 $46,513 $50,872 $272,101
3% Annual Increase $54,023 $59,638 $67,527 $76,422 $399,948
4% Annual Increase $66,709 $74,691 $84,903 $96,049 $504,750
5% Annual Increase $77,523 $86,372 $103,239 $115,738 $599,605
6% Annual Increase $82,425 $92,932 $112,126 $126,991 $659,091
7% Annual Increase $87,773 $101,383 $119,831 $133,160 $701,740
Max Net Benefits $65,839 $70,631 $75,742 $80,686 $513,724
36
by Alternative
2% Annual Increase $2,122 $3,891 $6,222 $8,505 $10,591
3% Annual Increase $3,179 $5,999 $9,250 $12,202 $14,584
4% Annual Increase $4,190 $7,216 $10,621 $13,927 $16,073
5% Annual Increase $4,865 $7,728 $11,475 $14,895 $16,137
6% Annual Increase $5,422 $7,903 $11,247 $14,248 $16,094
7% Annual Increase $6,238 $8,602 $11,937 $14,590 $16,274
Max Net Benefits $7,187 $8,305 $10,184 $12,678 $15,194
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $12,397 $13,943 $16,167 $18,044 $91,881
3% Annual Increase $16,784 $18,833 $21,560 $24,520 $126,910
4% Annual Increase $18,282 $19,968 $22,202 $26,080 $138,558
5% Annual Increase $17,601 $19,197 $19,290 $25,537 $136,725
6% Annual Increase $16,675 $17,122 $13,215 $22,327 $124,255
7% Annual Increase $17,389 $15,293 $12,189 $20,524 $123,037
Max Net Benefits $16,537 $18,136 $20,099 $23,062 $131,382
15
This table is from a societal perspective, thus, civil penalties are deleted from the costs because they are a
transfer payment.
2% Annual Increase $2,339 $4,382 $7,831 $9,606 $12,245
3% Annual Increase $3,383 $6,403 $10,368 $13,122 $16,251
4% Annual Increase $4,654 $7,718 $11,880 $14,750 $17,954
5% Annual Increase $5,370 $8,401 $12,340 $15,272 $18,868
6% Annual Increase $5,990 $8,185 $12,553 $15,501 $18,185
7% Annual Increase $5,945 $8,348 $12,936 $15,590 $18,031
Max Net Benefits $6,351 $7,885 $11,678 $14,001 $17,918
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase $13,467 $14,811 $16,093 $17,244 $98,019
3% Annual Increase $18,180 $19,462 $21,415 $23,259 $131,842
4% Annual Increase $20,165 $21,535 $23,227 $25,839 $147,721
5% Annual Increase $20,874 $22,380 $23,529 $26,967 $154,000
6% Annual Increase $19,828 $21,155 $22,745 $26,607 $150,748
7% Annual Increase $20,134 $21,364 $23,003 $27,178 $152,528
Max Net Benefits $19,456 $20,969 $22,003 $23,701 $143,962
38
2% Annual Increase $4,460 $8,273 $14,053 $18,111 $22,836
3% Annual Increase $6,562 $12,402 $19,617 $25,324 $30,835
4% Annual Increase $8,843 $14,934 $22,501 $28,677 $34,027
5% Annual Increase $10,234 $16,129 $23,815 $30,166 $35,005
6% Annual Increase $11,412 $16,088 $23,800 $29,749 $34,279
7% Annual Increase $12,183 $16,950 $24,873 $30,180 $34,305
Max Net Benefits $13,538 $16,190 $21,862 $26,678 $33,112
Alternative MY
2022 MY
2023 MY
2024 MY
2025 9-Year
2% Annual Increase $25,864 $28,754 $32,260 $35,288 $189,900
3% Annual Increase $34,964 $38,295 $42,975 $47,778 $258,751
4% Annual Increase $38,447 $41,503 $45,429 $51,919 $286,279
5% Annual Increase $38,474 $41,578 $42,819 $52,504 $290,725
6% Annual Increase $36,503 $38,277 $35,960 $48,934 $275,003
7% Annual Increase $37,524 $36,657 $35,191 $47,702 $275,565
Max Net Benefits $35,993 $39,104 $42,102 $46,763 $275,344
39
Passenger Cars
Alternative MY
2017 MY
2018 MY
2019 MY
2% Annual Increase 1,140 2,266 3,636 4,964 6,091
3% Annual Increase 1,757 3,581 5,558 7,516 9,063
4% Annual Increase 2,654 4,779 7,091 9,577 11,373
5% Annual Increase 3,716 6,078 8,600 11,389 13,971
6% Annual Increase 4,652 7,262 9,845 13,094 15,061
7% Annual Increase 5,246 8,029 10,655 13,940 15,579
Max Net Benefits (3% Discount Rate) 5,820 6,941 8,999 10,469 11,814
Rate) 6,717 8,142 9,675 11,384 13,556
Rate) 6,716 8,142 9,678 11,362 13,519
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase 7,077 7,878 9,110 10,125 52,288
3% Annual Increase 10,423 11,681 13,374 15,536 78,489
4% Annual Increase 12,829 14,603 17,266 19,679 99,851
5% Annual Increase 15,438 17,431 21,605 24,369 122,597
6% Annual Increase 16,591 19,112 24,243 27,619 137,479
7% Annual Increase 17,753 21,254 25,655 29,078 147,189
Rate) 15,492 18,156 20,546 22,717 126,385
Rate) 14,745 17,518 19,996 22,123 123,799
16
The choice of a 3 or 7 percent discount rate can impact the results of the Max Net Benefits and Total
Cost = Total Benefits scenarios. The results of all other scenarios are not impacted by choice of discount
rate. Results for both 3 and 7 percent discount rates are therefore presented for both Max Net Benefits and
Total Cost = Total Benefit scenarios.
40
Light Trucks
Alternative MY
2017 MY
2018 MY
2019 MY
2% Annual Increase 1,315 2,399 4,133 5,028 6,275
3% Annual Increase 1,950 3,542 5,579 7,134 8,849
4% Annual Increase 2,826 4,640 7,119 9,019 11,089
5% Annual Increase 3,526 5,580 8,172 10,389 13,000
6% Annual Increase 4,478 6,559 9,466 11,955 13,935
7% Annual Increase 4,883 7,011 9,955 12,382 13,886
Rate) 6,294 7,325 9,305 11,076 13,148
Rate) 6,326 7,342 9,331 11,098 13,114
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase 6,792 7,388 8,013 8,458 49,802
3% Annual Increase 9,813 10,431 11,408 12,519 71,224
4% Annual Increase 12,283 13,425 14,314 15,848 90,564
5% Annual Increase 14,231 15,289 17,190 18,787 106,162
6% Annual Increase 15,139 16,351 17,907 19,709 115,499
7% Annual Increase 15,733 17,048 18,948 20,079 119,925
Rate) 13,824 15,254 16,708 18,597 111,531
Rate) 13,792 15,249 16,727 18,616 111,593
41
Combined
Alternative MY
2017 MY
2018 MY
2019 MY
2% Annual Increase 2,456 4,665 7,769 9,992 12,366
3% Annual Increase 3,707 7,123 11,138 14,649 17,912
4% Annual Increase 5,480 9,419 14,210 18,597 22,462
5% Annual Increase 7,242 11,657 16,772 21,778 26,971
6% Annual Increase 9,131 13,821 19,311 25,049 28,996
7% Annual Increase 10,129 15,040 20,610 26,322 29,465
Rate) 13,011 15,467 18,980 22,460 26,704
Rate) 13,042 15,483 19,009 22,459 26,633
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase 13,870 15,267 17,124 18,583 102,090
3% Annual Increase 20,235 22,112 24,781 28,055 149,713
4% Annual Increase 25,112 28,028 31,579 35,528 190,415
5% Annual Increase 29,669 32,720 38,795 43,157 228,759
6% Annual Increase 31,730 35,463 42,150 47,327 252,978
7% Annual Increase 33,487 38,302 44,603 49,157 267,115
Rate) 29,316 33,410 37,254 41,314 237,916
Rate) 28,537 32,767 36,722 40,739 235,392
42
Passenger Cars
Alternative MY
2017 MY
2018 MY
2019 MY
2% Annual Increase -6.8 -7.0 -7.2 -7.0 -7.2
3% Annual Increase -6.8 -7.0 -7.2 16.6 17.0
4% Annual Increase -6.8 -7.0 -7.2 424.8 965.3
5% Annual Increase 10.3 813.9 939.0 1,654.7 4,774.4
6% Annual Increase 10.3 813.9 1,135.4 5,980.6 8,528.9
7% Annual Increase 576.6 2,132.6 2,568.3 10,326.0 11,883.1
Max Net Benefits (3% Discount Rate) 910.3 922.6 4,160.3 4,693.2 5,106.8
Rate) 910.3 1,822.3 1,834.9 1,892.8 2,652.2
Rate) 910.3 1,822.3 1,834.9 1,892.8 2,546.2
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase -7.2 63.4 214.0 1,659.0 1,893.9
3% Annual Increase 18.2 89.6 309.1 4,580.3 5,009.8
4% Annual Increase 969.8 4,872.7 7,197.9 16,420.3 30,829.9
5% Annual Increase 6,870.7 12,033.9 24,720.4 35,241.4 87,058.6
6% Annual Increase 12,199.0 20,434.3 41,327.6 57,076.2 147,506.1
7% Annual Increase 19,360.3 35,126.2 53,854.8 68,386.4 204,214.3
Max Net Benefits (3% Discount Rate) 5,343.6 5,817.0 6,393.3 10,013.7 43,360.8
Rate) 8,075.0 17,796.8 22,179.7 30,782.1 87,946.1
Rate) 3,684.4 13,414.6 17,800.8 26,103.5 70,009.8
43
Light Trucks
Alternative MY
2017 MY
2018 MY
2019 MY
2% Annual Increase 0 0 0 0 0
5% Annual Increase 0 0 0 1.7 1.6
6% Annual Increase 0 733.8 708.6 727.2 724.6
7% Annual Increase 0 733.8 708.6 727.2 724.6
Max Net Benefits (3% Discount Rate) 0 771.9 746.2 736.9 734.2
Max Net Benefits (7% Discount Rate) 0 0.0 0.0 1.7 1.6
Rate) 0 776.8 751.1 736.9 734.3
Rate) 0 776.8 751.1 736.9 734.3
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
4% Annual Increase 0 0 0 280.3 280.3
5% Annual Increase 457.5 2,041.7 4,683.9 4,709.1 11,895.5
6% Annual Increase 1,187.7 3,355.7 5,051.0 8,088.8 20,577.5
7% Annual Increase 5,011.4 6,448.3 8,993.5 9,199.0 32,546.4
Max Net Benefits (3% Discount Rate) 741.5 2,211.3 2,267.1 2,271.7 10,480.8
Rate) 741.5 2,211.3 3,815.6 4,447.5 14,215.1
Rate) 741.5 2,211.3 3,815.6 4,447.5 14,215.1
44
Combined
Alternative MY
2017 MY
2018 MY
2019 MY
2% Annual Increase -6.8 -7.0 -7.2 -7.0 -7.2
3% Annual Increase -6.8 -7.0 -7.2 16.6 17.0
4% Annual Increase -6.8 -7.0 -7.2 424.8 965.3
5% Annual Increase 10.3 813.9 939.0 1,656.4 4,775.9
6% Annual Increase 10.3 1,547.7 1,844.0 6,707.7 9,253.5
7% Annual Increase 576.6 2,866.4 3,276.9 11,053.2 12,607.7
Max Net Benefits (3% Discount Rate) 910.3 1,694.5 4,906.6 5,430.1 5,841.1
Rate) 910.3 2,599.1 2,586.0 2,629.7 3,386.5
Rate) 910.3 2,599.1 2,586.0 2,629.7 3,280.5
Alternative
MY
2022
MY
2023
MY
2024
MY
2025
9-Year
Total
2% Annual Increase -7.2 63.4 214.0 1,659.0 1,893.9
3% Annual Increase 18.2 89.6 309.1 4,580.3 5,009.8
4% Annual Increase 969.8 4,872.7 7,197.9 16,700.6 31,110.1
5% Annual Increase 7,328.2 14,075.6 29,404.3 39,950.5 98,954.1
6% Annual Increase 13,386.7 23,790.1 46,378.6 65,165.0 168,083.5
7% Annual Increase 24,371.7 41,574.5 62,848.3 77,585.4 236,760.7
Rate) 8,816.5 20,008.1 25,995.3 35,229.6 102,161.2
Rate) 4,426.0 15,625.9 21,616.4 30,551.0 84,224.9
45
Breakdown of Costs and Benefits for the Preferred Alternative
Tables 13 and 14 provide a breakdown of the costs and benefits for the preferred
alternative using a 3 percent and 7 percent discount rate, respectively.
Table 13
Preferred Alternative
Passenger Cars and Light Trucks Combined
Technology Costs ($1,738) ($4,180) ($7,289) ($10,826) ($14,559)
Social Costs and
Consumer Surplus
from Additional
Refueling Time Value $365 $700 $1,161 $1,620 $1,833
Petroleum Market
Congestion Costs ($554) ($1,149) ($2,020) ($2,725) ($3,480)
Accident Costs ($255) ($539) ($954) ($1,292) ($1,660)
Noise Costs ($10) ($22) ($38) ($52) ($66)
Fatality Costs $18 $59 ($85) $14 ($9)
CO2 $738 $1,608 $2,900 $4,015 $5,228
CO $0 $0 $0 $0 $0
VOC $8 $19 $34 $46 $68
NOX $17 $31 $51 $71 $56
PM $106 $231 $415 $558 $776
SOX $108 $231 $408 $549 $706
Net Social Benefits $8,054 $17,471 $31,055 $42,759 $55,291
Net Total Benefits $6,316 $13,291 $23,766 $31,934 $40,732
46
9-Year
Total
Social Costs and
Consumer Surplus
from Additional
Refueling Time Value $2,081 $2,290 $2,658 $2,585 $15,292
Petroleum Market
Congestion Costs ($3,987) ($4,594) ($5,331) ($6,199) ($30,040)
Accident Costs ($1,899) ($2,187) ($2,533) ($2,931) ($14,250)
Noise Costs ($76) ($87) ($101) ($117) ($568)
Fatality Costs $41 $9 $9 ($47) $10
CO2 $6,057 $7,081 $8,321 $9,667 $45,614
CO $0 $0 $0 $0 $0
VOC $78 $95 $110 $141 $601
NOX $59 $94 $107 $109 $594
PM $889 $1,063 $1,224 $1,444 $6,705
SOX $804 $811 $938 $844 $5,401
47
Technology Costs ($1,738) ($4,180) ($7,289) ($10,826) ($14,559)
Social Costs and
Consumer Surplus
from Additional
Refueling Time Value $292 $560 $928 $1,295 $1,463
Petroleum Market
Congestion Costs ($442) ($917) ($1,611) ($2,174) ($2,777)
Accident Costs ($204) ($429) ($760) ($1,030) ($1,323)
Noise Costs ($8) ($17) ($30) ($41) ($53)
Fatality Costs $18 $59 ($85) $14 ($9)
CO2 $738 $1,608 $2,900 $4,015 $5,228
CO $0 $0 $0 $0 $0
VOC $7 $15 $28 $38 $55
NOX $14 $27 $44 $61 $50
PM $87 $189 $339 $456 $630
SOX $86 $184 $326 $438 $564
48
Total
Social Costs and
Consumer Surplus
from Additional
Refueling Time Value $1,661 $1,829 $2,124 $2,065 $12,217
Petroleum Market
Congestion Costs ($3,186) ($3,673) ($4,267) ($4,968) ($24,015)
Accident Costs ($1,515) ($1,746) ($2,024) ($2,346) ($11,376)
Noise Costs ($60) ($70) ($81) ($94) ($454)
Fatality Costs $41 $9 $9 ($47) $10
CO2 $6,057 $7,081 $8,321 $9,667 $45,614
CO $0 $0 $0 $0 $0
VOC $63 $76 $88 $113 $483
NOX $54 $80 $91 $93 $513
PM $721 $852 $983 $1,148 $5,405
SOX $642 $649 $750 $673 $4,313
49
Annualized Costs and Benefits for the Preferred Alternative
Tables 15 and 16 present the annualized costs and benefits of the MY 2017-2025 CAFE
rule, at 3 and 7 percent discount rates respectively. Annualization is a generic term
used to refer to the estimation of the annual payment that would be required to pay back a
loan at a given rate on a constant payment schedule for a set duration. In the context of
NHTSA‘s analysis of the impact of the proposed CAFE rule, annualized costs can be
interpreted as society‘s yearly mortgage payment on both the technology and social
costs of this rule. Similarly, annualized benefits represent the average value of the stream
of benefits per year that society receives as a result of this rule over the duration of the
given fleet‘s life. 17
In Tables 15 and 16, each model year‘s costs and benefits are annualized to a base year of
2017. Annualized net benefits are the difference between annualized costs and
annualized benefits. While it may seem counterintuitive that total annualized net benefits
are greater in the case of a 7 percent discount rate versus a 3 percent discount rate, this
outcome is a consequence of the concept of annualization in that the use of the higher rate
results in higher societal costs, as the principal is paid back at a higher interest rate,
while benefits are also greater, as the benefit payments to society are also made at a
higher interest rate.
(Billions of 2009$, 3% Discount Rate)
Annualized
MY 2017 ($0.1) $0.7 $0.6
MY 2018 ($0.3) $1.5 $1.2
MY 2019 ($0.5) $2.6 $2.1
MY 2020 ($0.6) $3.4 $2.8
MY 2021 ($0.8) $4.3 $3.4
MY 2022 ($0.9) $4.8 $3.8
MY 2023 ($1.1) $5.3 $4.2
MY 2024 ($1.2) $6.0 $4.8
MY 2025 ($1.4) $6.8 $5.4
Total ($7.0) $35.3 $28.4
17
In the calculation of annualized costs and benefits, a 36-year lifetime was applied to the combined fleet
for each model year.
(Billions of 2009$, 7% Discount Rate)
Annualized
MY 2017 ($0.2) $0.9 $0.7
MY 2018 ($0.4) $1.8 $1.4
MY 2019 ($0.7) $3.1 $2.4
MY 2020 ($0.9) $3.9 $3.1
MY 2021 ($1.1) $4.8 $3.7
MY 2022 ($1.2) $5.1 $3.9
MY 2023 ($1.4) $5.5 $4.2
MY 2024 ($1.5) $6.0 $4.5
MY 2025 ($1.6) $6.5 $4.9
Total ($8.9) $37.8 $28.9
I. INTRODUCTION
The purpose of this study is to analyze the effects of the proposal that would extend the
National Program of Federal and corporate average fuel economy (CAFE) standards
and greenhouse gas (GHG) emissions standards to model years (MYs) 2017-2025 for
passenger cars and light trucks. Under this joint rulemaking, NHTSA is proposing
CAFE standards under Energy Policy Conservation Act of 1975, as amended by the
Energy Independence and Security Act of 2007 (EISA), and EPA is proposing GHG
emissions standards under the Clean Air Act (CAA). This study includes a discussion
of the technologies that can improve fuel economy, the potential impacts on retail prices,
safety, the discounted lifetime net benefits of fuel savings, and the potential gallons of
fuel saved, among other things.
In working together to develop the next round of standards for MYs 2017-2025, NHTSA
and EPA are building on the success of the first phase of the National Program to regulate
fuel economy and GHG emissions from U.S. light-duty vehicles, which established the
coordinated standards for model years (MY) 2012-2016. 18
Continuing the National
Program would ensure that all manufacturers can build a single fleet of U.S. vehicles that
would satisfy all requirements under both programs as well as under California‘s
program, helping to reduce costs and regulatory complexity while providing significant
energy security and environmental benefits. President Obama announced plans for these
proposed rules on July 29, 2011 and NHTSA and EPA issued a Supplemental Notice of
Intent (NOI) outlining the agencies‘ plans for proposing the MY 2017-2025 standards
and program. 19
The State of California and thirteen auto manufacturers representing over
90 percent of U.S. vehicle sales provided letters of support for the program concurrent
with the Supplemental NOI. 20
The United Auto Workers (UAW) also supported the
announcement. 21
As envisioned in the Presidential announcement and Supplemental
NOI, the proposal sets forth proposed MYs 2017-2025 standards as well as detailed
supporting analysis for those standards and regulatory alternatives for public review and
comment.
One aspect of this phase of the National Program that is unique for NHTSA, however, is
that the passenger car and light truck CAFE standards for MYs 2022-2025 must be
conditional, while EPA‘s (and also California‘s) standards for those model years will be
legally binding when adopted in this round. EISA requires NHTSA to issue CAFE
standards for at least 1, but not more than 5, model years. 22
To maintain the
harmonization benefits of the National Program, NHTSA will therefore propose and
adopt standards for all 9 model years from 2017-2025, but the last 4 years of standards
will be conditional. The passenger car and light truck CAFE standards for MYs 2022-
2025 will be determined with finality in a subsequent, de novo notice and comment
18
Final Rule published in the Federal Register on May 7, 2010 (75FR 25324). 19
76 FR 48758 (August 9, 2011). 20
Commitment letters are available at http://www.nhtsa.gov/fuel-economy (last accessed Aug. 24, 2011). 21
The UAW‘s support was expressed in a statement on July 29, 2011, which can be found at
http://www.uaw.org/articles/uaw-supports-administration-proposal-light-duty-vehicle-cafe-and-
49 U.S.C. 32902(b)(3)(B).
52
rulemaking conducted in full compliance with EPCA/EISA and other applicable law –
beyond simply reviewing the analysis and findings in the present rulemaking to see
whether they are still accurate and applicable, and taking a fresh look at all relevant
factors based on the best and most current information available at that future time.
To facilitate that future rulemaking, NHTSA and EPA will conduct a comprehensive
mid-term evaluation. Up to date information will be developed and compiled for the
evaluation, through a collaborative, robust, and transparent process, including notice
and comment. The agencies fully expect to conduct the mid-term evaluation in close
coordination with the California Air Resources Board (CARB), consistent with the
agencies‘ commitment to maintaining a single national framework for regulation of
fuel economy and GHG emissions.23
NHTSA examined regulatory alternatives in two ways. First, we examined these
alternatives considering how maximum feasible standards can be set within the
limitations of EPCA/EISA. In conducting this estimated required or standard setting
analysis, NHTSA assumes manufacturers do not use dedicated alternative fuel vehicles,
electric vehicles, plug-in electric vehicles, dual-fueled alternative fuel vehicles (through
MY 2020), or credits earned for over-compliance to meet the required mpg levels, as
directed by 49 U.S.C. 32902(h).
Second, we conducted more of a real-world analysis of what manufacturers are likely to
do under CAFE standards and taking advantage of flexibilities and adjustments offered
under CAFE standards, as actually provided by EPCA/EISA. In conducting this
projected achieved or real world under EPCA/EISA analysis, NHTSA assumes
manufacturers will use dedicated alternative fuel vehicles, electric vehicles, plug-in
electric vehicles, dual-fueled alternative fuel vehicles (for all model years), and
flexibilities allowed in the proposal and credits earned for over-compliance to meet the
required mpg levels.
Under both types of analysis, NHTSA assumes some manufacturers will continue, as they
have done historically, not to meet the standards and instead pay civil penalties for non-
compliance, as permitted by EPCA. NHTSA also assumes manufacturers will apply A/C
efficiency improvements and off-cycle technology improvements to meet the standards.
The analysis contained in this document reflects the impacts that NHTSA believes would
result from manufacturers increasing the fuel economy of their vehicles in order to meet
the stringency levels required or projected to be achieved under the different regulatory
alternatives. When the agency was examining issues that relate to standard setting and
the estimated required mpg levels, then the analysis is based on the estimated
required mpg levels. Thus, analyses in Chapter V on technology relate to the amount of
technology needed to get to the estimated required mpg level. Analyses in Chapter X
relating to Sensitivity Analyses and Chapter XI on probabilistic uncertainties relate to the
estimated required mpg level. However, estimates of the levels to be achieved by
23
The agencies also fully expect that any adjustments to the standards as a result of the mid-term evaluation
process from the levels enumerated in the current rulemaking will be made with the participation of CARB
and in a manner that continues the harmonization of state and Federal vehicle standards.
53
manufacturers (Chapter VI), costs and sales (Chapter VII), benefits and fuel savings
(Chapter VIII), impact of weight reduction on safety (Chapter IX),and net benefits
(Chapter X) are based on the more real world projected achieved mpg levels that are
more likely to be achieved by the manufacturers.
54
The Energy Policy and Conservation Act (EPCA) states that:
When deciding maximum feasible average fuel economy … the Secretary of
Transportation shall consider technological feasibility, economic practicability, the
effect of other motor vehicle standards of the Government on fuel economy, and the
need of the United States to conserve energy.24
Thus, EPCA specifically directs the Department to balance the technological and economic
challenges related to fuel economy with the Nation‘s need to conserve energy. The concerns
about energy security and the effects of energy prices and supply on National economic well-
being that led to the enactment of EPCA persist today. The demand for petroleum grew in
the U.S. up through the year 2005, peaking at 20.8 million barrels per day, and has since
declined to an average of 18.8 million barrels per day in 2009.25 World demand, however, is
expected to continue to rise until 2035.26
Since 1970, there have been a series of events that suggest that the behavior of petroleum
markets is a matter for public concern.
Average annual crude oil prices rose from $68 per barrel in 2007 to $95 per barrel in
2008, having peaked at $129 per barrel in July 2008. Prices declined to $37 per
barrel in January 2009, but then rose to $113 per barrel in April 2011.27 As recently
as 1998, crude prices averaged about $13 per barrel.28 Gasoline prices more than
tripled during this ten-year period, from an annual average of $1.07 in 1998 to $3.30
in 2008. As the price of oil bounces up and down, the price of gasoline also rises and
falls, hitting an average of $3.71 in July of 2011.29
24
Petroleum Consumption. See http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=5&pid=5&aid=2
U.S Department of Energy, Energy Information Administration, International Energy Outlook 2010. See
http://www.eia.gov/oiaf/ieo/highlights.html (last accessed August 30, 2011). 27
U.S. Department of Energy, Energy Information Administration, Short-Term Energy Outlook, U.S.
Refiner Average Acquisition Cost per Barrel of Crude Oil. See
http://www.eia.gov/emeu/steo/pub/cf_query/index.cfm (last accessed August 30, 2011). 28
Ibid. 29
U.S. Department of Energy, Energy Information Administration, Weekly Retail and Gasoline Diesel
Prices. See http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_m.htm (last accessed, August 30, 2011).
U.S. domestic petroleum production stood at 10 million barrels per day in 1975, rose
slightly to 10.6 million barrels per day in 1985, and by 2009 had declined to 7.3
million barrels per day.30 Domestic production is predicted to increase through 2035.
Between 1975 and 2005, U.S. petroleum consumption increased from 16.3 million
barrels per day to 20.8 million barrels per day.31 In 2009, vehicle miles traveled and
consumption fell compared to the 2005 levels. Net petroleum imports accounted for
51.5 percent of U.S. domestic petroleum consumption in 2009.32 Worldwide oil
demand is fairly inelastic: declining prices do not induce large increases in
consumption, while higher prices do not significantly restrain consumption. For
example, the price of unleaded regular gasoline rose from an average of $2.57 in
2006 to $3.25 in 2008 (a 26.5 percent increase)33 and vehicle miles traveled
decreased by 1.3 percent.34 Within the United States, demand for gasoline, diesel, and jet fuel within the transportation sector is particularly inelastic.
Demand for oil is projected to increase significantly worldwide in the next several
decades, resulting in upward oil cost pressure. Between 2007 and 2035, total world
petroleum consumption is expected to grow from 86.1 to 110.6 million barrels per day.35
Foreign oil production facilities, refineries, and supply chains have been disrupted
from time to time, either by wars, political action by oil producers, civil unrest, or natural disasters.
High oil prices, sometimes induced by disruptions in oil markets, have often coincided with rising inflation and subsequent economic recessions.
Greenhouse gas emissions from the consumption of petroleum have become a subject
of increasing public policy concern, both in the United States and internationally.
Greenhouse gases in general and carbon dioxide in particular have not thus far been
subject to National regulation. Studies by multiple sources suggest that rising
atmospheric concentrations of greenhouse gases will damage human health and
welfare.36 There is a direct linkage between the consumption of fossil energy and
emissions of the greenhouse gas carbon dioxide, as essentially all of the carbon in
hydrocarbon fuels is oxidized into carbon dioxide when the fuel is combusted.
Reducing U.S. fossil petroleum consumption will generally induce a proportional reduction in carbon dioxide emissions.
30
See http://www.eia.gov/totalenergy/data/monthly/pdf/sec3_3.pdf (last accessed August 30, 2011). 31
See http://www.eia.gov/totalenergy/data/monthly/pdf/sec3_7.pdf (last accessed August 30, 2011). 32
U.S. Department of Energy, Energy Information Administration, Weekly Retail and Gasoline Diesel
Prices. See http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_m.htm (last accessed, August 30, 2011). 34
U.S. Department of Transportation, Federal Highway Administration, Office of Highway Policy
Information, Quick Find: Vehicle Miles of Travel, Table VM-2 (2006 and 2008). Available at
http://www.fhwa.dot.gov/policyinformation/quickfinddata/qftravel.cfm (last accessed August 30, 2011). 35
August 30, 2011). 36
IPCC 2007: Climate Change 2007: Synthesis Report: Contributions of Working Groups I, II, and III to
the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, [Core writing team,
Pachauri, R.K. and Reisinger, A. 9eds.)] (Published by the Intergovernmental Panel on Climate Change,
2008). Available at http://www.ipcc.ch/pdf/assessment-report/ar4/syr/ar4_syr.pdf (last accessed August
Energy is an essential input to the U.S. economy, and having a strong economy is essential to
maintaining and strengthening our National security. Secure, reliable, and affordable energy
sources are fundamental to economic stability and development. Rising energy demand
poses a challenge to energy security, given increased reliance on global energy markets. As
noted above, approximately half of the petroleum consumed in the U.S. is imported.
Conserving energy, especially reducing the Nation‘s dependence on petroleum, benefits the
U.S. in several ways. Improving energy efficiency has benefits for economic growth and the
environment, as well as other benefits, such as reducing pollution and improving security of
energy supply. More specifically, reducing total petroleum use decreases our economy‘s
vulnerability to oil price shocks. Reducing dependence on oil imports from regions with
uncertain conditions enhances our energy sec

corporate average fuel economy for my 2017-my 2025 passenger cars and light trucks

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