corporate average fuel economy (cafÉ) standards anticipated impacts on future revenues
TRANSCRIPT
Corporate Average FuelEconomy (CAFÉ) Standards
Anticipated Impacts on Future Revenues
Corporate Average Fuel Economy (CAFÉ) Standards History
• First enacted by US Congress in 1975 to improve the economy of cars and light vans after the 1973 Arab Oil Embargo.
• Based on a weighted average of a manufacturer’s current model year passenger cars or light trucks with a Gross Vehicle Weight under 8,500 pounds.
• If the manufacturer exceeds the standard, a penalty is assessed.
$5.500.1 mpg under the standard
X Manufacturer’s Total Production for the US Domestic Fleet
CAFÉ Standards
• National Highway Traffic Safety Administration (NHTSA) regulates the CAFÉ standards
• US Environmental Protection Agency measures vehicle fuel efficiency.
• US Congress specifies that CAFÉ standards must be set at the “maximum feasible level” with consideration for:• Technological feasibility• Economic practicality• Effect of other standards on fuel economy• Need of the nation to conserve fuel
• NHTSA must issue new standards eighteen (18) months in advance of model year production.
Proposed CAFÉ Standards
• The new standards are presented not simply as passenger vehicles and light duty trucks.
• Standards are now expressed in terms of the vehicle’s footprint • (Wheel Base X Average Track Width)
• For passenger vehicles the two categories are:• 41 square feet or smaller (Honda Fit)• 55 square feet or bigger (Mercedes-Benz S-Class)
• For light trucks the two categories are:• 41 square feet or smaller (Nissan Juke)• 75 square feet or bigger (Ford F-150)
Proposed CAFÉ Standards for Larger Passenger Vehicles
Model Year Passenger Car Standard
1978 18.0 mpg
1980 20.0 mpg
1985 27.5 mpg
1990 27.5 mpg
2000 27.5 mpg
2010 27.5 mpg
2011 27.5 mpg
2012 * 28.0 mpg
2016* 31.0 mpg
2020* 36.0 mpg
2025* 46.0 mpg
* Indicates new ‘footprint’ standard.
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CAFE
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arge
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Passenger car with a footprint 55 sq. ft. or larger
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CAFE
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rHistoric and Proposed CAFÉ Standard
Passenger car with a footprint 41 sq. ft. or smallerPassenger car with a footprint 55 sq. ft. or largerLight Truck wth a footprint 41 sq. ft. or smaller
Factors Influencing Driving Habits
• Distance to Destination• Presence of Passengers• Personal Value of Time• Comfort• Cargo/Freight Needs• Interim Stops / Destinations• Roadway Congestion• Safety• Cost of Fuel• Cost of Vehicle
Impacts of An Increase in CAFÉ Standards
• Slight increase in vehicle miles traveled• Slight decrease in the gallons of gasoline
consumed• Commensurate decrease in motor fuel revenues
related to gasoline consumption at the State and National level
• Increased costs to society in the form of additional crashes, fatalities, injuries, and property damage
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2025
Billi
ons
Historic and Projected Annual Vehicle Miles Traveled on all Public Roads in Arkansas
Without Increased CAFÉ Standards in Place (Status Quo) With Increased CAFÉ Standards in Place
Projected Annual Vehicle Miles Traveled (with no change in the
CAFE Standard)
Projected Annual Vehicle Miles Traveled
(with changes in the CAFE Standard)
By 2025 the projected increase in the Annual VMT will be 43.2 billion miles traveled or 1% greater than without the improved fuel efficiency.
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2025
Mill
ions
Historic and Projected Motor Fuel Consumption in Arkansas
Historic and Projected Motor Fuel Consumption With Revised CAFÉ Standards
Projected Net Motor Fuel Consumption (without a change in the CAFE Standards)
By 2025 the projected decrease in the Annual Motor Fuel Consumption will be 640,000 gallons or 24% less than without the improved fuel efficiency.
Projected Net Motor Fuel Consumption (with an increase in the CAFE Standards)
$100
$150
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$450
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2025
Mill
ions
Historic and Projected State Motor Fuel Revenues Available for Distribution
State Motor Fuel Taxes Available for Distribution
Projected State Motor Fuel Taxes Available for Distribution Reflecting Improved CAFÉ Standards
Projected Net Motor Fuel Revenues (without a change in the CAFE Standards)
Projected Net Motor Fuel Revenues (with an increase in the CAFE Standards)
By 2025 the projected decrease in the Anticipated Motor Fuels Revenue will be $88 million or 22% less than without the improved fuel efficiency.
Strategies to Offset the Fiscal Impacts of Increased CAFÉ Standards
• Advocate revenue option other than Motor Fuel- based tax
• Increase Motor Fuel taxes• Reduce expenditures
• Cost Savings• Reduce System Miles• Accept lower pavement conditions as the norm• Allow more severe congestion along major corridors
Anticipated Implementation Schedule
• Originally expected the proposed 2017-2025 standards to be officially released September 30, 2011.
• Indication from the US DOT and US EPA that a proposal is expected no sooner than November 2011.
• Delays are reportedly linked to preparing detailed of the official proposal to ensure it covers issues likely to be voiced during the comment period.
• The administration is expected to remain on track to issue final guidance by July 2012.
Shrinking Highway Dollar
Shrinking Highway Dollar
Shrinking Highway Dollar
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2023
2024
2025
Mill
ions
Historic and Projected Motor Fuel Consumption in Arkansas
Historic and Projected Motor Fuel Consumption With Revised CAFÉ Standards
Projected Net Motor Fuel Consumption (without a change in the CAFE Standards)
By 2025 the projected decrease in the Annual Motor Fuel Consumption will be 500,000 gallons or 21% less than without the improved fuel efficiency.
Projected Net Motor Fuel Consumption (with a phased-in increase in the
CAFE Standards)
0
500
1,000
1,500
2,000
2,500
3,000
1990
1991
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2009
2010
2011
2012
2013
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2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Mill
ions
Historic and Projected Motor Fuel Consumption in Arkansas
Historic and Projected Motor Fuel Consumption With Revised CAFÉ Standards
Projected Net Motor Fuel Consumption (without a change in the CAFE Standards)
By 2025 the projected decrease in the Annual Motor Fuel Consumption will be 500,000 gallons or 21% less than without the improved fuel efficiency.
Projected Net Motor Fuel Consumption (with a phased-in increase in the
CAFE Standards)
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