US mandates future fuel economy gains

The old saying goes "When America sneezes, the whole world catches cold", so a new legislative act in the US this week will undoubtedly prove contagious for us in Australia.

American President, George W Bush has signed off the Energy Independence and Security Act of 2007 -- a bill with a two-fold intent; firstly improving vehicle economy overall and secondly, reducing America's reliance on fuel supplies from nations that are occasionally hostile or, at best, non-aligned.

The bill sets a 'Renewable Fuel Standard' which imposes on fuel suppliers to produce at least 36 billion US gallons of biofuel from 2022. In effect, fourteen years from now, the country will be producing five times the current level of biofuel production.

By 2020, the set-in-concrete national fuel economy standard will be 35 miles per gallon (6.7L/100km) for new cars. At the present point in time, that's the preserve of diesels and small hybrids. This represents a 40 per cent improvement in the current standard and is expected to save "billions of gallons of fuel", according to the statement from the White House. It's the first time the fuel economy standard has been revised since 1975, not long after the first oil shock.

A caveat to the new standard is described as "attribute-based standards" which ensure that improved fuel efficiency doesn't come at the expense of road safety.

The new bill appears to vindicate the view that improved fuel economy will come largely from technological gains in engine development, rather than reduced weight necessarily. This is in line with similar remarks made recently by Dr Andreas Truckenbrodt of Mercedes-Benz, during his recent trip to Australia for the Banksia Awards (more here).

Given that most engines fitted or to be fitted in Ford and Holden's locally manufactured large cars either come from America or are exported to the US, we can expect to see substantially more fuel efficient engines in our locally manufactured cars too. This has already been presaged by Chris Gubbey (more here) in his remarks about the Pontiac G8 with Active Fuel Management. Expect too, that the current HFV6 in the Commodore variants will possibly give way to the direct-injection version of the engine already fitted to the Cadillac CTS.

Similarly, Ford's Falcon should go the clean/green/lean route when it adopts the Cyclone V6 engine in 2010 (more here).

Along with the improved residential energy efficiency expected to be the outcome of the previous energy bill in 2005, the US government anticipates reducing CO2 emissions by billions of tons in coming years.

The two acts indicate a shift in attitude away from cheaper energy towards cleaner energy -- including clean coal, solar, wind and nuclear energy generation. Controversially perhaps, the President has mooted increasing domestic (American) oil production from sources in environmentally sensitive areas of the US, such as the Outer Continental Shelf and the Arctic National Wildlife Refuge.

If passed by the American Congress, this will reduce America's dependency on other OPEC states. The President has also asked Congress to double the current capacity of the Strategic Petroleum Reserve to protect the US from disruptions to oil supply.

One other issue arising from the new act, which may have some interesting consequences; US states will no longer be in a position to set their own emissions agenda. This leaves a state like California out on a limb and utterly reliant on the federal government legislation for cleaner air. It also means that potentially, the US market could open up to cleaner diesel technology in the future.

If nothing else, the new legislation will spur both fuel producers and vehicle manufacturers to take action unprecendented in the past thirty years. Expect more cars such as the Chevrolet Volt (pictured) to enter the market.

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