Thursday, October 23rd, 2014

The Obameter

Reduce dependence on foreign oil


"Will cut U.S. oil consumption of foreign oil by 2.5 million barrels of oil per day, take 50 million cars worth of pollution off the road, and save American consumers more than $50 billion at the gas pump." [No time frame given for that statement]


Updates

Fuel efficiency standards projected to meet campaign goals

In 2008, candidate Barack Obama made a series of very specific energy promises.

His initiatives would reduce dependence on foreign oil, he said, by cutting American consumption by 2.5 million barrels a day. He would remove 50 million cars worth of pollution from the road and save American consumers more than $50 billion at the gas pump. (He didn't say how long it would take.)

Just one major policy initiative — fuel efficiency — is projected to meet those goals. A spokeswoman for the National Highway Traffic Safety Administration pointed out the administration's new fuel efficiency standards for cars and light-duty trucks should do all that — and in some cases more — by 2025.

Specifically, the Obama administration claims new rules for cars and light-duty trucks will:

• Save 12 billion barrels of oil by 2025, which works out to about 2.3 million a day. John O'Dell, an expert in fuel standards at auto information site Edmunds.com who sits on a National Research Council committee on alternative fuels and vehicles, notes that population growth will consume some of that saved oil. Still, it represents a decrease in consumption from a world without the fuel standards. Meanwhile, the lack of a time frame in the original promise means any decrease over time would add up in Obama's favor.

Reduce greenhouse gas emissions by 6 billion metric tons. That easily works out to more than 50 million cars by 2025 when we did math, based on the Environmental Protection Agency's estimate of 5.1 metric tons per vehicle per year. The Union of Concerned Scientists estimates savings in 2027 the equivalent of taking 70 million cars and light trucks off the road for a year.

Save consumers more than $1.7 trillion at the gas pump. That's far more than the $50 billion Obama's campaign promised. Note that consumer savings was promised "at the gas pump.” Those savings will be at least partly offset by higher vehicle prices. So total pocketbook savings will depend on how long consumers keep their cars, among other things. O'Dell at Edmunds.com expects very little payback to individual consumers, even if lower fuel costs compensate for higher vehicle prices over the life of a car. But the wording in the promise was specific to fuel costs.

The administration's estimates are based on a model that was largely lauded in a report from the Government Accountability Office, the investigative arm of Congress, and accounts for some common points of criticism of fuel savings estimates, such as that drivers of more fuel-efficient vehicles may simply drive more, cutting into savings.

Meanwhile, independent groups such as the Union of Concerned Scientists also calculate those standards would meet or exceed Obama's campaign goals in a similar time frame, by 2027 — and two years sooner if you throw in the administration's new standards for medium and heavy-duty trucks, according to David Friedman, deputy director for clean vehicles.

Still, even if the administration's projections are correct, the standards still aren't a guarantee. In fact, car and light truck standards for 2022-25 won't be finalized until after a mid term review and could shift depending on the auto industry's ability to meet them. (You can read the final rule for 2017 and later.)

Meanwhile, a report from the Republican-led House Committee on Oversight and Government Reform on the administration's new auto regulations said the White House strong-armed automakers into agreeing to aggressive targets they may not be able to meet. Still, most auto companies say they'll be able to comply.

How are things going so far?

The Obama administration extended and expanded fuel efficiency standards boosted under President George W. Bush, and trends are headed in the right direction.

In 2011, the United States imported about 45 percent of the oil it consumed, the lowest level since 1995. The nine-month average for 2012 shows that percentage continuing to fall, with imports down, U.S. exports up and consumption down.

Still, it's important to note the drop in consumption isn't just a result of increased fuel efficiency. A weak economy has also contributed since 2008.

"Tightening of CAFE standards is a noteworthy accomplishment, but it's not the complete story,” said Jim DiPeso, vice president for policy and communications for ConservAmerica, a conservative conservation group.

As the U.S. Energy Information Administration notes, there's no single explanation for reduced oil imports. The drop partly reflects economic weakness since the financial crisis in 2008, though it started earlier. The agency also notes factors such as "changes in efficiency and consumer behavior” and increases in domestic biofuel production. The agency projects that energy efficiency efforts, such as tighter fuel economy standards, will "prove increasingly important in moderating future demand growth.”

We'll watch to see whether U.S. oil imports continue to fall. But based on projections of the impact of the Obama administration's fuel efficiency standards, we rate this Promise Kept.

Sources:

Email interview with Lynda Tran, director of communications for the National Highway Traffic Safety Administration, Nov. 15, 2012

Email interview with Jonathan Cogan, press contact, U.S. Energy Information Administration, Nov. 14, 2012

Email interview with David Friedman, deputy director, clean vehicles, Union of Concerned Scientists, Nov. 27, 2012

Email interview with John O'Dell, senior editor, Edmunds.com, Nov. 26, 2012

Email interview with Jim DiPeso, vice president for policy and communications, ConservAmerica, Nov. 26, 2012

National Highway Traffic Safety Administration, "Obama Administration Finalizes Historic 54.5 mpg Fuel Efficiency Standards," Aug. 28, 2012

Environmental Protection Agency and Department of Transportation, "2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards; Final Rule," Oct. 15, 2012 (PDF)

House Committee on Oversight and Government Reform, "A Dismissal of Safety, Choice, and Cost: The Obama Administration's New Auto Regulations," Aug. 10, 2012

Government Accountability Office, "Vehicle Fuel Economy: NHTSA and EPA's Partnership for Setting Fuel Economy and Greenhouse Gas Emissions Standards Improved Analysis and Should Be Maintained," February 2010

Energy Collective, "Can the new CAFE standards deliver (promised benefits)?” Aug. 20, 2012

U.S. Energy Information Administration, "Frequently Asked Questions: How dependent is the United States on foreign oil?" updated July 16, 2012

U.S. Energy Information Administration, "How dependent are we on foreign oil?" updated July 13, 2012

U.S. Energy Information Administration, "Annual Energy Outlook 2012,” June 25, 2012

U.S. Energy Information Administration, "Monthly Energy Review, Petroleum Trade: Overview," October 2012

Environmental Protection Agency, "Calculations and References," accessed Nov. 26, 2012

Edmunds.com, "FAQ: New Corporate Average Fuel Economy Standards," updated Aug. 28, 2012

U.S. Energy Information Administration, "U.S. Oil Import Dependence: declining no matter how you measure it," May 25, 2011

PolitiFact Obameter, "Raise fuel economy standards,” April 5, 2010

PolitiFact Obameter, "Provide tax credits for automakers to build fuel-efficient cars,” updated Aug. 6, 2012

PolitiFact Obameter, "Establish a low carbon fuel standard,” updated Aug. 2, 2012

PolitiFact Obameter, "Require production of more biofuels,” updated Aug. 10, 2012

PolitiFact Obameter, "Devote federal resources to promote cellulosic ethanol,” updated Aug. 10, 2012

PolitiFact Obameter, "Reduce oil consumption by 35 percent by 2030,” updated Oct. 12, 2009

PolitiFact, "Ad says President Barack Obama put in place 'historic fuel efficiency standards," Jan. 6, 2012

Obama advances in gas goal drive

The last time we visited President Barack Obama's promise to reduce oil consumption, he'd been pushing a number of initiatives meant to lower fuel consumption and improve energy efficiency.

The approval of new fuel efficiency standards for cars and light trucks has advanced this promise further.

The new rules, which were proposed in May 2009 and put on the books April 1, 2010, will require cars and trucks manufactured starting in 2012 to have an average fuel economy of 35.5 miles per gallon by 2016.

According to the Obama administration, the mandate will also save consumers money and reduce oil consumption.

Here are the specifics:

Better fuel efficiency will save about 1.8 billion barrels of oil over the lifetime of the vehicles regulated under the new law. On the campaign trail, Obama specifically said that he wanted to save about 2.5 million barrels of oil daily. Quick math tells us that, on average, the new rules will save that much per day over a period of about two years. The trouble here is that Obama did not give a time frame on this part of his promise; he did not specify how long he wanted to save 2.5 million barrels of oil per day.

The Obama administration also says that the rules will take the equivalent of 50 million cars and light trucks off the road in 2030, which was also part of Obama's original promise.

Obama promised to save consumers $50 billion at the gas pump. This part of his promise is trickier to measure. Officials say that "the rules could potentially save the average buyer of a 2016 model year car $3,000 over the life of the vehicle." So, that means that upwards of 17 million people would have to buy new cars in 2016, and at best save $3,000 over the lifetime of their new cars to meet Obama's $50 billion goal.

Another recent announcement from the Obama administration could increase the amount of oil produced domestically even further. On March 31, 2010, Obama said that he would be opening up new areas to drilling, though critics say that the amount of oil new drilling will produce won't be nearly enough to satisfy American demand for fossil fuels for that long.

So, Obama has made some important headway on this promise. But we're still not sure how these new rules will impact how much people pay for gas. Furthermore, some of Obama's other initiatives to improve energy efficiency and reduce reliance on fossil fuels aren't finished yet. As a result, we'll be leaving this promise at In the Works for now.

Sources:

The National Highway Traffic Safety Administration, DOT, EPA Set Aggressive National Standards for Fuel Economy and First Ever Greenhouse Gas Emission Levels For Passenger Cars and Light Trucks, April 1, 2010
Reuters, Obama opens new oil drilling offshore in climate drive, by Jeff Mason and Tom Doggett, March 31, 2010

Obama initiatives meant to reduce dependence on oil

On the campaign trail, Barack Obama pledged to wean the United States off foreign oil.
 
"I will set a clear goal as president: In 10 years we will finally end our dependence on oil in the Middle East," he said when he accepted the Democratic nomination for president.
 
That's no small thing, and Obama has taken some steps to come through on his promise.
 
Here are some examples:
 
Ending fossil fuel subsidies
 
On Sept. 25, 2009, G-20 leaders rallied behind Obama's plan to phase out about $300 billion in fossil fuel subsidies, meaning tax breaks and government assistance for coal and oil. The move will help reduce carbon emissions — by about 10 percent in 2050 — but the White House is also portraying the decision as a way to reduce the United States' dependence on foreign oil.
 
Here's their reasoning: Most of those subsidies go to foreign oil producers. Sending that money overseas impedes investment in energy sources, particularly renewable fuels, at home.
 
Support renewable fuel
 
Taking its cues from California, the Environmental Protection Agency announced on May 26, 2009, that it was planning to increase the Renewable Fuel Standard, an existing mandate that requires gasoline to be blended with ethanol or diesel with biodiesel, from 9 billion gallons of of blended fuel to 36 billion gallons in by 2022. The administration will use the standard to set greenhouse gas limits on these renewable fuels — officially called a Low Carbon Fuel Standard — as well. For example, biofuels would have a minimum 20 percent reduction in greenhouse gas emissions, and advanced and cellulosic biofuels — fuel made from left over biomass such as wood chips — would need to have a 50 or 60 percent reduction in greenhouse gas emissions, respectively.
 
Meanwhile, buried in the cap-and-trade bill now pending in Congress is a provision that would require some electricity companies to produce at least 10 percent of their energy from renewables in 2010 and 20 percent of their energy from renewable resources by 2020.
 
And the stimulus package was chock-full of incentives for renewable energy production, including $2.5 billion for "applied research, development, demonstration and deployment activities" that alternative energy companies will be able to tap into. Of that, the bill earmarks $800 million for biomass projects, $400 million for geothermal projects and another $50 million for research to improve information and communications technology. But that leaves $1.25 billion for such things as solar and wind research.
 
Increasing Energy Efficiency
 
Obama has also used the cap-and-trade bill to advance his energy efficiency agenda. For example, under the bill, new buildings will be 30 percent more energy efficient in 2012 and 50 percent more efficient in 2016. Those standards will increase 5 percent every three years. So by 2030, new buildings will be 75 percent more efficient than they are today.

Making vehicles more efficient is another part of Obama's strategy to reduce U.S. dependence on foreign oil. The Transportation Department and the Environmental Protection Agency are drafting new rules that would increase fuel efficiency by an average of 5 percent a year. By 2016, cars and trucks would be 40 percent more efficient than today's vehicles, according to Obama's proposal.
 
So, Obama has taken multiple steps toward reducing our dependence on foreign oil. But he did not set a time frame for his goal, and many of these individual efforts are still making their way through Congress and administration bureaucracy. So, for now, we'll rate this one In the Works.

Sources:

Los Angeles Times, G-20 leaders pledge to phase out fossil fuel subsidies , by By Jim Tankersley, Sept. 26, 2009

ABC News, Obama pledges to end oil dependency , By Karina Rusk,  Aug. 29, 2008

Associated Press, Obama wants worldwide end of fossil fuel subsidies , By Seth Borenstein, Sept. 23, 2009