Give Bush credit for his energy proposal.

The conventional wisdom debunked.
Jan. 29 2007 3:07 PM

What the President Got Right

Give Bush credit for his energy proposal.

Illustration by Mark Alan Stamaty. Click image to expand.

It "fell far short" (Washington Post editorial) and offers only "marginal" gains (New York Times editorial) and is "nonsense" (Charles Krauthammer) and "isn't much" (Thomas Friedman). All these are descriptions of the energy policy proposal in George W. Bush's State of the Union address last week. They don't match the plan itself.

Last week Bush proposed something environmentalists, energy analysts, greenhouse-effect researchers, and national-security experts have spent 20 years pleading for: a major strengthening of federal mileage standards for cars, SUVs, and pickup trucks. The No. 1 failing of U.S. energy policy is that vehicle mile-per-gallon standards have not been made stricter in two decades. Nothing the United States can do in energy policy is more important than an mpg increase. Presidents George Herbert Walker Bush, Bill Clinton, and, until last week, George W. Bush had all refused to face the issue of America's low-mpg vehicles, which are the root of U.S. dependency on Persian Gulf oil and a prime factor in rising U.S. greenhouse-gas emissions. But now Bush favors a radical strengthening of federal mileage rules, and last week to boot became the first Republican president since Gerald Ford to embrace the basic concept of federal mileage regulation (called the Corporate Average Fuel Economy standard).

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This should have been Page One headline material—PRESIDENT CALLS FOR DRAMATIC MPG REGULATIONS. Instead, most news organizations pretended Bush's mpg proposal did not exist, or buried the story inside the paper, or made only cryptic references to it. In his 2006 State of the Union address, when Bush said America was "addicted to oil" but proposed no mpg improvements, critics rightly pummeled the president. Now Bush has backed the needed reform, and the development is being downplayed or even ridiculed.

What's going on? First, mainstream news organizations and pundits are bought and sold on a narrative of Bush as an environmental villain and simply refuse to acknowledge any evidence that contradicts the thesis. During his term the president has significantly strengthened the Clean Air Act to reduce air pollution caused by diesel fuel and diesel engines, to reduce emissions from Midwestern power plants, to reduce pollution from construction equipment and railroad locomotives, and to reduce emissions of methane, which is 20 times more potent as a greenhouse gas than carbon dioxide. You'd never know these reforms even happened from the front page of the New York Times, which for reasons of ideology either significantly downplays or fails to report them. Second, with the war in Iraq appearing a fiasco of the first magnitude, editors and pundits feel Bush must be ridiculed on all scores—even when he offers intelligent, progressive proposals. This is mendacious; it also backfires, since mocking everything the president says reduces the impact of objections specific to his foreign policy.

Last Tuesday, Bush proposed that the CAFE standard grow 4 percent stricter per year. Essentially, this would mean that each new model year would need to get one mpg better gas mileage than cars from the year before. The last time the federal fuel-economy standard was strengthened was 1988. Nineteen years with zero progress on mpg is the leading reason U.S. petroleum consumption continues to rise. Bear in mind that since 1988, Republicans have doggedly opposed stricter fuel-economy rules, denouncing the CAFE system in venomous language as intruding on a supposed "right" to drive wasteful, large vehicles. (The Constitution says you have a right to read a newspaper and to own a gun; courts consistently rule that government may regulate vehicles on public roads for public purposes such as safety and energy efficiency.) Now, George W. Bush has embraced the system of mandatory federal mpg standards, asking they become much stricter. For this he's denounced!

Does 4 percent improvement per year sound too modest? According to the EPA, average actual fuel consumption of new vehicles sold in the United States is 21 miles per gallon. (The figure on the sticker in the showroom is often higher, but it is calculated under unrealistic conditions—no passengers or cargo in the car, air conditioner off, gentle acceleration, and no exceeding the speed limit.) Improve on 21 mpg by 4 percent annually for 10 years, and the number rises to 31 mpg. If the actual fuel economy of new vehicles were 31 mpg, oil-consumption trends would reverse—from more oil use to less.

In fact, the goal the president laid out in his State of the Union address sounds remarkably like a repetition of the first phase of federally mandated mpg increases. When the OPEC oil embargo took effect in 1974, there were no federal fuel-economy standards, and average actual consumption by new vehicles was 13 mpg. From 1975 to 1987, automakers were required to make continuous improvements in fuel economy. New-vehicle actual gasoline economy rose to a peak of 22 mpg in 1987. What else happened during that period? U.S. petroleum consumption declined from 18 million barrels per day when the CAFE rules were enacted to 15.2 million barrels per day in 1983. That decline broke the OPEC price cartel, and oil prices fell worldwide.

Now U.S. oil consumption has risen back to 20 million barrels daily, and the pattern of consumption has shifted. In the 1970s, about half of oil use was for transportation, the other half for heating, industry, and electricity generation. Now three-quarters of oil use is for transportation: Petroleum demand for cars, trucks, trains, and planes has gone way up, while petroleum demand in other sectors has been flat or declined. The reason for rising petroleum demand for cars and trucks is that Americans today own twice as many cars and trucks as they did 30 years ago and drive them nearly three times as many miles. Yet since 1988, fuel economy standards have not toughened.

The likely result of the White House proposal for tougher standards would be a replay of the first big mileage improvement—U.S. petroleum demand would fall, reducing greenhouse gases and reducing the political influence of Persian Gulf dictatorships. How can the New York Times possibly think that would represent only a "marginal" improvement?

While endorsing the first CAFE strengthening since the oil embargo, Bush also called for a law mandating a fivefold increase in U.S. ethanol production in the next decade and requiring refineries to blend more ethanol into gasoline. There's a lot to debate about ethanol—its value can be questioned, but that's another article. Let's assume for the sake of argument that a big jump in ethanol production is a good idea. In assuming this, we will join the New York Times editorial board and Thomas Friedman, both of whom lavishly praised last fall's Proposition 87, a California referendum mostly designed to boost ethanol production. Friedman said California would "make history" if it passed the proposition. * A Times editorial called this and other California green-energy proposals "pathbreaking."

For good or ill, California voters rejected Prop 87. But suppose it and other California mpg initiatives had gone into effect: Projections suggest petroleum consumption in California would over a period of years have declined about 25 percent. Suppose Bush's mpg and ethanol proposals go into effect: Projections suggest petroleum consumption in the United States will decline about 20 percent. How come a California plan to cut oil use 25 percent in one state is brilliant, while a White House plan to cut oil use 20 percent across the entire country is insignificant?

It's true that last week Bush did not endorse any mandatory restrictions on greenhouse gases, and the time for such restrictions has come. Many who reacted negatively to the Bush plan were really saying they were upset that Bush did not offer a plan to reduce the odds of artificial global warming. Yet Bush did offer the most important oil-use reduction proposal since 1975, and reducing petroleum consumption will cut greenhouse-gas emissions somewhat. Bush's energy critics seem to say that because he did not give them everything they wanted, any major concession he did offer must be deplored. But stricter federal mpg rules would lead to far-reaching changes in American oil-consumption curves and American automobile culture. Give Bush some credit!

Less than a week after botching its coverage of the mpg improvements Bush proposed, the New York Times banner-headlined a story saying Saudi Arabia now wants to keep petroleum prices relatively low at $50 a barrel. Have the oil sheiks decided they are making too much money? The sheiks don't want the United States taking real action to reduce our dependence on Persian Gulf oil, so they hope to lull Capitol Hill into thinking oil will stay cheap and mpg improvements won't be needed. The media may not have understood Bush's mileage proposal. The Saudi princes surely did.

Correction, Jan. 30:The original version of this piece implied that California's Proposition 87 would have served only to boost ethanol production. In fact, the law proposed support for other alternative fuels. (Return to the corrected sentence.)

Gregg Easterbrook is a fellow at the Brookings Institution. His most recent book is The Progress Paradox: How Life Gets Better While People Feel Worse.

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