New CAFE Targets. Do They Compute?

The White House made a big announcement this week that auto manufacturers have agreed to new fuel-efficiency standards to be implemented by 2016. This is a federal standard and supercedes the fragmented state standards that were previously in effect. So far, so good.

The core of the presentation can be summed up by the quote on Bloomberg.com. "The five percent annual increase in fuel mileage over five years would save 1.8 billion barrels of oil and reduce 900 million metric tons of greenhouse gas emissions by 2016, according to the administration. That is the equivalent of taking 177 million vehicles off the road."

Well, there's a slight correction there - the 177 million vehicle reduction is over five years, not the one year mentioned by Obama in the press conference. But is it even accurate? What would it take to reduce consumption by 1.8 billion barrels total between now and 2016?

I created a spreadsheet to test the figures. Obviously I have made a mistake! Take a look.

It's fairly self-explanatory except for the column Avg MPG. That was calculated from the other columns with the formula =+((B6*C6)+(D6*F6)-(E6*(C6-3)))/A7. That is, current # of vehicles times avg MPG + new vehicles sold times their avg MPG minus old vehicles scrapped times their avg MPG (divided by total vehicles in use). What is the avg MPG of the scrapped vehicles? I guessed it was three MPG less that the average vehicle in use. But even if I had used eight MPG lower mileage, the result doesn't change more than 40%. In fact, assuming the scrapped vehicles MPG was 20% of the average car on the road, the savings is still under one billion barrels.

In short, I don't get a savings of 1.8 billion barrels. I get about 500 million barrels. No number of poor-mileage vehicles scrapped can explain the discrepancy. 500 million barrels savings over 5 years is equivalent to removing about 3.5% of the 1.4 billion passenger vehicles on the road over that same five years. The math cuts both ways; if you insist on using savings over five years in order to make the numbers look bigger, the percentages don't change.

Anybody care to find my error? I thought I was being conservative by assuming all the MPG increase did not occur in 2015/1016. And shouldn't the administration publish their calculations so we can see what assumptions they made?

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I've recalculated the difference using a simpler formula and come up with different figures. Unfortunately, these figures are even lower. What's wrong with this calculation... ?

(Vehicles retired*12,000 mpy)/avg MPG yields gallons not used (where the average of retired vehicles is 3 MPG less that the overall average.) Subtract from that the consumption of the new vehicles sold. The difference is net millions of gallons saved for that year. I'm getting a total savings of 300 million gallons over five years; that's less than the 500 million I got using the more complex and probably less precise method.