Why Obama's New Fuel Rules for Trucks Are a Huge Deal

trucks heavy duty
(c) Jeremy Woodhouse
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This afternoon, while Wall Street wobbled and England burned, President Obama announced new fuel efficiency standards for heavy-duty trucks and buses. Despite the fact that the announcement won't get much play – efficient school buses aren't nearly as sexy as vanishing billions and violence in the streets – it's a pretty big deal. 

For one thing, it's the first time there have ever been fuel efficiency standards for trucks.  The new rules, which apply to model years 2014 to 2018, will force big rigs to slash fuel consumption by up to 23 percent. Gasoline-powered heavy-duty pickups and vans will have to cut consumption by 10 percent, or by 15 percent if the vehicles run on diesel fuel.  The White House projects savings of 530 million barrels of oil and $50 billion in fuel costs over the expected lives of the vehicles covered by the new standards.

And the new rules are not just about saving fuel.  The air will be cleaner, and the planet a little cooler.  Vickie Patton, general counsel for the advocacy group Environmental Defense Fund, says the regulation would cut climate pollution by 270 million metric tons between 2014 and 2018. 

Even though automakers were largely on board with the deal, a spokesperson for House Majority Leader Eric Cantor bashed the deal, arguing with wearisome, 1970s-era rhetoric that the new rules would "further tie the hands of job creators and add yet another hurdle to getting the economy up and running." 

But what's really important about this latest announcement is that it shows how far the truck and auto industry have come in moving into the 21st century.  Just last month, Obama announced a deal with automakers to double vehicle-efficiency standards to 54.5 MPG by 2025.  If the agreement gets finalized, it will be, as David Friedman, deputy director of the Clean Vehicles program at the Union of Concerned Scientists put it to me, "a historic deal."

In the world of energy politics, the fact that automakers have agreed to these ambitious new standards is mind-boggling.  After all, for decades Detroit fought hard for decades against tougher fuel efficiency standards, arguing that the engineering challenges were huge and expensive to implement and would likely kill the U.S. auto industry.

Of course, as it turned out, they were wrong.  Building gas-guzzlers in an age of rapidly rising oil prices is what nearly killed the industry.  Now, after a federal bailout, they have seen the light.  

If only the same could be said of Big Oil.

Yesterday, a New York Times editorial argued that "if the Republicans are truly determined to slash the budget and end government waste," they could save $100 billion over ten years by terminating ethanol subsidies and ending tax breaks for Big Oil.  But, as the Times pointed out, that will never happen, in part because the industry's highly-paid lobbyists will claim that ending $4 billion a year in subsidies will cut production, boost prices at the pump and kill whatever is left of our economy.

"It's bullshit, of course.  Big Oil doesn't need these subsidies.  As the Times points out, the Big Five – Exxon Mobil, BP, ConocoPhillips, Chevron and Shell – reported profits of $35.1 billion for just the second quarter of this year.  And the Times points out that back in 2005, even James Mulva, the head of ConocoPhillips, admitted that the industry didn't need these tax breaks to continue exploring for oil. 

It's just greed, pure and simple. 

President Obama often talks about cutting oil subsidies, and Congress sometimes votes on it, but nothing ever happens.  It's not hard to understand why – powerful lobbyists, cowardly politicians, overblown fears of rising gas prices.  But now that America is going broke, maybe that dynamic will change.  Maybe the moral outrage of cutting back school budgets, laying off cops, and closing hospitals in order to fatten Big Oil's bottom line will become even too glaring for the 12-member "super committee" in charge of finding $1.6 trillion in budget cuts to ignore. 

"By getting on board with fuel efficiency standards, Detroit has proven themselves capable of doing the right thing," Friedman told me. "Now it's time for Big Oil to step up and do the same."