The Hidden Costs of Obama's Fuel Efficiency Standards

Obama's new fuel standards sacrifice consumer choice.

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Thomas Pyle is the president of the Institute for Energy Research

Within a span of three weeks, President Obama has announced back-to-back new fuel economy standards for passenger vehicles and trucks. New regulations put in place will require a corporate average fuel economy (CAFE) of 54.5 miles per gallon for passenger vehicles by 2025. New standards for trucks will require a 10 to 20 percent increase in fuel efficiency before 2018.

Whether President Obama realizes it or not, fuel efficiency does not come without compromising other aspects of a vehicle. One feature that will undoubtedly be affected by these new rules is vehicle cost.

According to a study conducted by the Center for Automotive Research, the new passenger vehicle standards could eventually cost consumers an additional $5,000-$6,000 for each new vehicle. Even if gas prices rose to $6.00 per gallon, the average American driver may not recoup that huge price increase through fuel savings. Similarly, new rules for trucks are expected to add an additional $1,050 for work trucks and $6,220 for supercab tractors. [See the 10 priciest years in history for gas.]

One of the most efficient ways to increase the amount of miles a vehicle can travel per gallon of gasoline is to reduce the weight of the vehicle. Therefore, auto manufacturers will be forced to make cars that are smaller and lighter in order to meet President Obama’s new CAFE standards. Far from a win for consumers, this type of government-knows-best policy is the exact opposite of how a market economy functions. Instead of making their own demands, car buyers will be forced to comply with a federal mandate that insists on prioritizing fuel efficiency above all else—safety, comfort, size, and performance all take a back seat. Car buyers will be forced to pay more and have fewer vehicle options to choose from.

Given the fact that this is such an important policy goal for President Obama, it is fair to look at his own driving habits. The president is chauffeured in a vehicle known as The Beast, a 10,000-pound limousine that gets 8 miles to the gallon. In order to achieve maximum safety and security for the president, the vehicle must be extremely heavy which, of course, decreases its fuel efficiency. [See a slide show of the 10 states that use the most energy per capita.]

Nobody expects the president to trade in his Beast for a Smart Car, but he should extend that same courtesy to all American motorists and let them choose the vehicle that makes the most sense for them and their families. Americans are smart enough to weigh the costs and benefits of safety, fuel efficiency, comfort, and all other factors when purchasing a vehicle.

The Obama administration’s latest fuel economy mandates are an aggressive step away from consumer choice and towards government control. Every day, Americans are seeing the negative consequences of the administration’s increasingly aggressive meddling in the economy—more government control and less consumer choice.

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