Legislation and regulations written in Washington have wide-ranging implications for the quest to develop more fuel-efficient commercial vehicles. Federal emissions and fuel consumption standards have been one of the key drivers of efforts to improve the fuel efficiency of heavy trucks and engines, for example, while federal R&D and manufacturing support has helped encourage companies to develop new fuel-efficient technologies. Washington is by no means the sole – or even necessarily the primary – driver of the effort to develop fuel-efficient commercial vehicles, but Washington policies clearly play an important role.
Washington is by no means the sole – or even necessarily the primary – driver of the effort to develop fuel-efficient commercial vehicles, but Washington policies clearly play an important role.
The problem today is that Washington is gripped by political, economic, and fiscal uncertainty, making the future role of federal policy more uncertain than it has been for years. This is particularly clear in the area of environmental policy. While the process of writing the recent light and heavy vehicle greenhouse gas (GHG) emissions and fuel consumption standards may have been strikingly co-operative, debates about environmental and climate policy have in general become more strident and confrontational. Efforts by the Environmental Protection Agency (EPA) to regulate GHG emissions are subject to broad political and legal challenges that could have a very real impact on future emissions and fuel economy rules for light and heavy vehicles. Such pressures could, in the most extreme case, pose a threat to the Obama Administration’s “National Program” and its goal of shaping a single set of stringent national vehicle emissions rules.
Uncertainty is also evident in terms of federal support for “clean” vehicle technologies. Deals reached over the past six months ensure that such federal programmes will be under budget pressure for the next decade – and the Congressional “Super Committee” on deficit reduction may call for even more spending restraint. House Republicans are pushing for even deeper cuts than those already enacted, while trying to rescind funds from a high-profile vehicle manufacturing initiative. The ongoing scandal surrounding federal loan guarantees for now-bankrupt solar panel firm Solyndra merely complicates the picture, leading some to lambaste federal “green” technologies programmes as “venture socialism”. The White House and many Congressional Democrats are strong supporters of federal vehicle technology programmes, but harsh budget realities and opposition in Congress mean that the future of those programmes is by no means clear.
Budget concerns are already pressuring plans for the federal infrastructure investments that will be needed to expand use of electric or alternative-fuel vehicles.
The same uncertainty affects federal policies toward alternative fuels and infrastructure. While Congress several years ago passed a law mandating increased biofuels consumption, many in Congress have since soured on biofuels. There is now bipartisan support for cutting ethanol tax and tariff incentives, raising questions about how federal biofuels targets will be met. Natural gas and electric vehicles are the subjects of intense industry interest, but even here government policy creates uncertainty. Increased use of “fracking” has made natural gas a more cost-competitive fuel, for example, but that process for extracting shale gas faces legal and legislative challenges at the federal, state, and local levels. Budget concerns are already pressuring plans for the federal infrastructure investments that will be needed to expand use of electric or alternative-fuel vehicles.
The reality is that uncertainty will be the name of the game in Washington through November 2012 – or beyond. All policy decisions over the next year will be influenced by the November 2012 US Congressional and presidential elections, and the outcome of those elections could have a major impact on future policy trends. Thus, while Washington has helped drive the quest for more fuel-efficient commercial vehicles, the federal driver may be distracted for at least the next year.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Ian C. Graig, chief executive of Global Policy Group, Inc., has written in the past in AutomotiveWorld.com on a wide variety of US policy trends and their implications for the automotive industry. Global Policy Group is a Washington-based research and government relations consultancy whose clients include leading US, European, and Japanese firms in the automotive, energy, utility, information technology, and financial services sectors. For more information, visit www.globalpolicy.com or contact Ian Graig directly at ian.graig@globalpolicy.com.
Ian Graig will be speaking at the Automotive World Commercial Vehicle Innovation Summit / USA 2011. Click for more details.
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