Why The U.S Oil Addiction is Still Strong 0

So after the major automakers agreed to increasing the fuel economy standard to 54 mpg by 2025, some car dealers have now united to fight it.

Dave Westcott, who runs a couple of showrooms in North Carolina works with the trade group behind the fight. Here’s what he had to say. . .

“This is a big jump, and we’d like to slow this process down and find out what’s working and what’s not. We’d like the public to be in control of what they would like.”

This is such a ridiculous comment.

Yes, the public wants cars the get horrible gas mileage. Are you kidding me?!!

A fuel economy standard of 54.5 mpg will save U.S. consumers more than $1 trillion at the pump by 2025.

If you think this is a bad idea, you’re an asshole.  Plain and simple.

This whole dog and pony show is just another pathetic attempt to slow progress. At some point, folks, we have to ask ourselves, “Why is progress such a bad thing?”

This is not about burdensome regulations or big government. It’s about conserving our resources and bolstering our national security. This is not a bad thing, and anyone who seeks to maintain the status quo of pathetically low fuel economy standards (which have long existed thanks to a very cozy relationship between automakers and Congress) is nothing more than a traitor to this country.

Raising the fuel economy standard is also good business.

In the 2009 University of Michigan report, “Fixing Detroit: How Far, How Fast, How Fuel Efficient,” researchers noted that the old culture within the domsetic auto companies systematically underestimated the value of fuel economy.

Here’s what they found. . .

  • An industry-wide mandated increase in fuel economy of 30% to 50% (35 MPG to 40.5 MPG) would increase the Detroit 3’s gross profits by roughly $3 billion per year, and increase sales by the equivalent of two large assembly plants
  • The Detroit 3 gain profits over base in all scenarios, with the largest profits gained from pursuing more aggressive fuel economy.
  • Japanese automakers profit gains are smaller than the Detroit 3, with the smallest profits gained from pursuing 50% increase (40.4 MPG) in fuel economy.
  • At 50% increase, the Japanese industry loses sales while the domestics continue to gain in sales and profitability, a result driven by the different starting points.
  • Because Detroit 3 automakers have long underestimated the consumer value of fuel economy, raising fuel economy standards will not cost more than consumers would be willing to pay.
  • In every scenario, the average cost-per-vehicle (direct plus indirect) is less than what consumers would be willing to pay.”

This particular report built on an earlier University of Michigan Transportation Research Institute study that predicted the Detroit automakers could lose billions in profits and thousands of jobs in the event of an oil spike. The study predicted that when gas crossed the $3 a gallon mark, losses could reach $11 billion.

By the time gas hit $4 a gallon, Ford and GM had combined losses of more than $57.2 billion.

So enough with the rhetoric and political posturing.

Raising the fuel economy standard is a step in the right direction.  Fighting it is just, for lack of a better word, stupid.

Traitors Unite To Keep Our Oil Addiction Strong originally appeared in Green Chip Stocks. Green Chip Review is a free 2x-per-week newsletter, is the first advisory to focus exclusively on investments in alternative and renewable energies.

Previous ArticleNext Article

Leave a Reply

Your email address will not be published. Required fields are marked *