Fuel Economy Bill Finally Passes in Congress, Ethanol Gets a Boost

December 18, 2007 at 8:26 pm | Posted in Politics and Policy, Transportation | Leave a comment
Tags: auto, cars, energy, energy bill, fuel, fuel economy

Today, congress approved the first increase in automobile fuel economy in 32 years. This is the beginning of a huge change for the auto industry.

Of all the energy bills floating about in D.C. lately, the fuel economy bill has always seemed the most reasonable and likely to pass – it was just a matter of finding a balance between what the automakers could handle economically and what eco-savers wanted.

The energy bill, which intends to boost mileage by 40 percent to 35 miles per gallon (likely that would be the average MPG of all an automaker’s vehicles in a certain class), passed the House 314-100 and now goes to the White House, following the Senate’s approval last week. Bush is actually expected to sign off on this one, at least according to a statement from the White House. I figure they know what they’re talking about.

Our country has finally realized that regardless of belief about global warming, we need to stop depending on foreign oil. When most of the middle east hates us, and that’s where a lot of the oil lies, it’s a good idea to do what we can to find alternate resources.

That’s why the ethanol industry gets a boost from the bill as well — it requires a six-fold increase in ethanol use to 36 billion gallons a year by 2022. But traditional ethanol, as many of you know, isn’t the best alternative. Pushing for more ethanol use will drive up food prices. Some say that the ethanol requirement section of the bill won’t work. I personally hope that there are huge advances in cellulosic ethanol and electric vehicles (and possibly that it will be easier to pass legislation to fund these projects in order to real oil independence as soon as it becomes obvious that corn ethanol alone won’t solve our problems).

The big issue here is that the government, at least at this time, isn’t successfully passing a larger bill that will help pay for these efforts by cutting back tax incentives to big oil companies. The money needs to come from somewhere for any significant advancement. Some oil companies like BP and Cheveron are involved in funding some research on the topic, but I don’t trust big oil to have a heavy hand in this.

The bill requires a massive increase in the production of ethanol for motor fuels, outlining a rampup of ethanol use from the roughly 6 billion gallons this year to 36 billion gallons by 2022. After 2015, the emphasis would be on expanded use of cellulosic ethanol, made from such feedstock as switchgrass and wood chips, with two thirds of the ethanol — 21 billion gallons a year — from such non-corn sources. – AP

Democrats said the fuel economy requirements eventually — when the bill’s rules take effect and the gas-savers are on the road — will save motorists $700 to $1,000 a year in fuel costs. The bill also requires new energy efficiency standards for appliances, lighting and commercial and government buildings.