Image: Carmel Cine fills her car’s tank
Alan Diaz  /  AP
Carmel Cine fills her car’s tank at a local gas station in Miami. The Obama administration is hinting that it will require carmakers to produce fleets of cars and trucks that get an average 56.2 miles per gallon by 2025.
Image: Paul A. Eisenstein, contributor
By contributor
updated 6/29/2011 2:14:08 PM ET 2011-06-29T18:14:08

The White House appears to be looking for a way to compromise on future fuel economy increases, but it remains to be seen whether planned new mileage rules will satisfy those on either side of the debate.

The Obama administration is hinting that it will require carmakers to produce fleets of cars and trucks that get an average 56.2 miles per gallon by 2025. That would represent a nearly a 60 percent increase over the 35.5 mpg mandate in place for 2016. But the end result, representing an increase of 5 percent annually, still would be significantly lower than the 62 mpg number the Environmental Protection Agency originally was considering.

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Proponents of an even bigger increase in fuel economy standards say the compromise figure would not do enough to reduce global warming or decrease America’s dependence upon foreign oil.

But some industry representatives and others say even the 56.2 mpg standard could result in costs that are more than the public can bear, leading to sharp declines in new car sales and the loss of thousands of automotive jobs. They have suggested a standard of perhaps 47 mpg, which would represent a 3 percent annual increase over a decade.

“Overly ambitious standards set 14 years in the future risk severe economic harm if consumers’ wants and needs are not met,” said Bailey Wood, a spokesman for the National Automobile Dealers Association.

The Corporate Average Fuel Economy or CAFE standards have been controversial since they were made law in 1975 following the first Middle East oil shock. Opponents of the standards were able to effectively freeze the rules for two decades, with only the most modest increases until the Obama administration negotiated an increase beginning with the 2012 model year through 2016.

Given sporadic run-ups in oil prices over the past two years and growing concerns about global warming, proponents of government-mandated fuel standards now feel they have momentum to achieve the biggest mileage increases since the original rules were passed more than three decades ago.

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Clearly, consumers want improved fuel economy. That is reflected in the market’s shift toward smaller vehicles and downsized powertrains. But growing frustration with government and public debate over global warming have made the original 62 mpg goal more difficult to sell than some had initially expected.

Also complicating matters: Americans are concerned about jobs, and a study issued this month by the Center for Automotive Research raised serious questions about the costs and benefits  of pushing fuel economy too far, too fast.

The risk “is serious,” proclaimed the CAR study, which said the higher standards could boost the price of a typical car sold in the U.S. by as much as $9,000 while reducing new car sales by up to 5.5 million units a year, potentially eliminating as many as 265,000 American jobs.

Advocates of CAFE standards decried the CAR report as “propaganda,” pointing instead to another study issued by the Boston Consulting Group on the same day as the CAR report.

The Boston Consulting Group is far less negative about the projected sharp rise in mileage. It would be “a lot cheaper than expected,” said Boston Consulting Group analyst Xavier Mosquet, who estimated the average cost at $2,000 per vehicle. That, he contended, would be easily paid for by fuel savings, especially if gas prices keep going up, as many expect.

Why such a discrepancy between the two projections? There are plenty of assumptions that go into forecasting what consumer demand will be more than a decade out — as well as the sorts of technology that might be available to meet those needs.

Industry leaders such as Ford global product development chief Derrick Kuzak say that motorists will not only be forced to substantially downsize, but that they will also likely no longer be able to get the sort of powertrains popular today. The industry will likely be forced to replace V8s, V6s and even smaller 4-cylinder engines with battery-based technologies that could limit range, performance and payload.

On the other hand, CAFE proponents point to the substantial number of conventional vehicles that already deliver 40 mpg on the highway without using hybrid technologies that could yield even more savings. The Boston Consulting study, for one, sees tremendous opportunities using direct injection, turbocharging and more advanced transmission systems.

The administration backed down on the earlier 62 mpg standard once the new Republican-majority House was seated, in January. But the issue of fuel economy is less partisan than some might think.

Liberal Sen. Carl Levin, D-Mich., is one of those siding with the industry, saying that even the reduced 56 mpg target is too high. On the other hand, a group of 15 prominent Republicans, including former governors, members of Congress and EPA administrators, wrote the White House last week to back the full 62 mpg target.

With consumers so worried about fuel prices, there are few who expect the CAFE debate to be put on the back burner again. What’s unclear is whether the new proposal is the point at which the White House expects to begin bargaining with the auto industry, or if it sees 56 mpg as the compromise it is willing to settle for.

Administration representatives have reportedly been meeting with officials from the auto industry, Capitol Hill leaders and others in recent days, hoping to take the political temperature.

“No decision has been made yet, but our goal remains to propose [a revised mileage] rule this September,” said White House spokesman Matt Lehrich.

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Video: Fuming over new fuel rules

Photos: Aerodynamics is back

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  1. Playing the angles

    By Paul A. Eisenstein , contributor

    Aerodynamics is back.

    In the 1980s, faced with rising fuel costs, automakers focused on improving aerodynamics as a way to increase the fuel efficiency of their vehicles, producing cars such as the now-famous Ford Taurus.

    Today, with higher requirements for vehicle fuel efficiency on the horizon, automakers are trying it again, squeezing as much power as they can from every drop of fuel by reconfiguring car shapes, reducing drag, using lighter materials and redesigning front grilles.

    Here’s a look at how automakers have optimized aerodynamics over the years to help reduce drag and improve fuel efficiency in their cars. (Ford / Wieck) Back to slideshow navigation
  2. Chrysler Airflow

    The 1934 to 1937 Chrysler Airflow proved to have a tremendous impact on the automotive industry, revealing just how much a streamlined body could yield in terms of performance and fuel economy. Today, aerodynamic designs are all the rage as carmakers look for ways to meet tough new fuel economy standards without pricing their products out of the market. (Behind the Airflow is a “coffin-nosed” Cord, the first American car to introduce wind-cheating pop-up headlamps.) (Paul A. Eisenstein / Back to slideshow navigation
  3. 1986 Ford Taurus

    Critics derided the 1986 Ford Taurus as the “jellybean car,” but the automaker had the last laugh. The sleek, aero-styling gave the first-generation Taurus a radically distinctive look at a time when most car designers focused on sharp angles and creases. The midsize sedan’s softly rounded shape was eventually mimicked by most of Ford’s competitors. The so-called “aero look” lost momentum through the 1990s as millions of American motorists shifted to brutish-looking pickups and SUVs. (Ford) Back to slideshow navigation
  4. Toyota Prius

    The world’s first mass-produced gas-electric powered vehicle and still the most popular, the Toyota Prius introduced mainstream motorists to fuel-saving hybrid power. But the reality is that much of the fuel-economy gains that the Prius gets over more conventional cars are not the result of its advanced, battery-based drivetrain. Toyota officials acknowledge that the rounded shape and sealed underbody substantially reduce energy normally lost to wind resistance. The Prius also uses special, low-rolling resistance tires to further improve mileage. (Mark Ralston / AFP - Getty Images) Back to slideshow navigation
  5. Mercedes-Benz Silver Arrow

    If the Chrysler Airflow revolutionized the way automotive designers looked at their products, a series of Mercedes-Benz race cars -- known as the Silver Arrows -- revealed that aerodynamics are even more important on a high-speed track. The streamlined models dominated the European race circuit through much of the pre-War decade. The Silver Arrow name reportedly came by accident. Legend has it that the 1934 Mercedes W25 came in just over the target weight of 750 kilograms (1650 pounds), so team manager Alfred Neubauer came up with the idea of scraping off the original white paint. (Paul A. Eisenstein / Back to slideshow navigation
  6. Formula One racer

    Over the years, the motor sports world has rapidly exploited aerodynamic design in a quest for ever-higher speeds. That’s especially important in the Formula One series, where teams spend much of the off-season testing their latest aero concepts on track and in wind tunnels. The Ferrari team dominated much of the last decade. While former Ferrari driver Michael Schumacher was clearly a force to be reckoned with, Ferrari’s aero work was arguably almost as important. (Bertrand Guay / AFP/Getty Images) Back to slideshow navigation
  7. 2011 BMW 1M Air Curtain

    Aerodynamic design does more than just reduce wind resistance -- it can also provide downforce to hold a car on the road, especially at higher speeds, while improving brake and engine cooling. The 2011 BMW 1M adopts the “Air Curtain” system originally introduced on the carmaker’s wildly popular Vision Concept vehicle. The system is used to compress and smooth out the airflow around the 1M’s wheels. The impact is a small but measurable improvement in aerodynamics and fuel efficiency, as well as a modest increase in brake cooling. (Paul A. Eisenstein / Back to slideshow navigation
  8. Porsche Cayman active wing

    An aerodynamic design that works at 40, 50 or maybe 60 mph might not be so effective at higher speeds, automotive developers have come to recognize. As a result, the industry is developing a variety of “active aero” technologies that can adapt accordingly. The wing on the rear of the Porsche Cayman -- and several other models from the German marque -- will adjust itself depending on how fast you’re driving. (Porsche) Back to slideshow navigation
  9. 2012 Ford Focus active grille shutters

    Active aerodynamic technology has traditionally been used on race cars and high-end vehicles from the likes of Porsche, but as mainstream carmakers compete to break through the critical 40 mpg barrier, new active aerodynamic technologies are appearing on even some small, lower-priced models like the new Eco version of the Chevrolet Cruze and its competitor, the Ford Focus, shown here. These cars use special shutters mounted behind the grille to reduce wind turbulence under the hood. When the engine heats up, however, these grilles open to allow more air to flow past the radiator. (Ford) Back to slideshow navigation
  10. Chrysler’s wind tunnel

    An aerodynamically efficient design yields “free fuel economy,” according to Chris Theodore, a former chief engineer at both Chrysler and Ford. To maximize the wind-cheating potential of their designs, most major carmakers now operate wind tunnels (like this one at Chrysler) that can simulate speeds in excess of 150 mph. The car industry is also borrowing a tip from animated film companies like Pixar and installing advanced computer systems that can simulate real world situations with amazing accuracy. (Chrysler) Back to slideshow navigation
  11. Chevy’s Volt-face

    Car designers contend that aerodynamics is a “black art,” rather than a science, so even the seemingly best computer simulation needs ultimately to be proven out in a wind tunnel. GM discovered this when it tested the original concept version of the Chevrolet Volt plug-in hybrid, which had sharp creases in the front bumper and a rounded tail. By simply reversing those shapes, designers increased the Volt’s range on battery power by more than 10 percent. (Martin Klimek / AFP - Getty Images) Back to slideshow navigation
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