GAS PRICES Big SUVs, trucks fuel need for oil

Loopholes allow trucks, vans and SUVs to escape fuel economy rules.
CHICAGO TRIBUNE
Three decades after the Arab oil embargo, the government's main weapon in weaning motorists from gas-guzzlers is stalled.
While full-size cars get the mileage of compacts from 30 years ago, Congress has not significantly increased fuel efficiency standards since 1975 and has not closed a loophole that allows manufacturers to sell sport-utility vehicles, minivans and other passenger models as trucks.
The key requirement for a passenger vehicle to be called a truck is that all seats except the driver's must be easily removable or foldable to form a cargo floor from front to back. Thus, Chrysler's hatchback car, the PT Cruiser, is classified a truck.
Big vehicles escape
Another loophole allows big trucks to escape fuel economy requirements. What's known as CAFE, which stands for corporate average fuel economy, only applies to vehicles with a gross weight of 8,500 pounds or less. So full-size vans and sport-utility vehicles such as the Hummer H1 are excluded.
"When CAFE came in, there was an assumption that gasoline would go to $3 to $5 per gallon. No one dreamed we would be driving around in an 8,500-pound passenger vehicle," said auto analyst Maryann Keller.
In 1975, trucks were workhorses and accounted for 23 percent of new-vehicle sales. They received a lower fuel efficiency standard under CAFE as a concession to farmers and businesses that depended on them.
Today, trucks account for more than half of new-vehicle sales. And with far more Americans tooling around in gas-guzzling sport-utility vehicles and V-8-powered trucks, overall fuel economy has generally declined since 1987.
As a result, the United States is still dependent on foreign oil, and motorists grumble each time gasoline prices fluctuate, mostly due to the increasing or cutting of oil supplies by the Organization of Petroleum Exporting Countries.
OPEC will reduce crude oil production in early November, a move expected to raise prices that already are up an estimated 20 percent since September, when OPEC announced its intention to cut production.
Lowest prices
Still, the United States boasts one of the lowest prices for gasoline in the world, and that partly explains the love affair with gas hogs.
There are no incentives for consumers to purchase more fuel-economical vehicles, said Steve Lyons, president of Ford Motor Co.'s Ford division.
"You've got to drive demand if you expect buying habits to change," he said.
Christopher Preuss, a General Motors spokesman in Washington, said automakers have to build vehicles consumers want to buy, and that means larger, more powerful models and trucks.
"It's a very rational economic response," Preuss said. "It's the price of fuel that drives demand. That's where the market is, that's where we have to go."
Keller, a member of a National Academy of Sciences panel that studied CAFE standards in 2001 at the behest of Congress, said the easiest way to dampen demand for big vehicles and trucks is to impose hefty gasoline taxes, "but the government lacks the political will to do it."
The panel did not even recommend higher taxes to Congress. "With the Bush administration and its anti-tax bias, we knew it was a nonstarter," Keller said.
The federal tax on a gallon of gasoline is 18.4 cents, and it was last raised in 1993, by 4.3 cents. States impose an average tax of 20 cents per gallon, and some counties and municipalities add smaller taxes.
Europe and Japan
Motorists in the United Kingdom pay gasoline taxes of more than $3 per gallon. Gasoline prices of more than $4 a gallon in Europe and Japan steer consumers toward fuel-efficient cars and public transportation. Sport-utility vehicles are far less popular, and pickup trucks are seldom used as personal transportation.
Charles Lave, a University of California at Irvine economist who also served on the National Academy panel, said higher gasoline taxes in the United States would complement CAFE standards by encouraging consumers to drive less and buy more efficient vehicles.
"There's no question that people do respond to gas price changes," he said. "(Higher prices) would not only create an incentive for every manufacturer to build more efficient vehicles, it would create an incentive for the driver of every existing vehicle to drive a little bit less."
Lave and Keller's panel recommended to Congress that lawmakers eliminate the truck loophole and instead group vehicles into weight classes.
Another recommendation would allow manufacturers that exceed CAFE standards to sell credits to other companies that fall short. That would give all manufacturers an incentive to improve corporate fuel economy.
Auto analyst Keller said domestic manufacturers are using low gas prices as an excuse.
The domestic companies, she said, have to offer efficient models in Europe and other markets where fuel economy is imperative.
"These are supposed to be global companies," Keller said. "The fact that we have cheap gas does not change that they have to have competitive technologies for everywhere they do business."