TCS Daily

Rep. Knollenberg Declines A Larger Cup of CAFE

By James K. Glassman - August 6, 2001 12:00 AM

Advancing conservation was one goal contained in the comprehensive energy legislation the House passed just before going on its annual August recess. Amid the bill`s bevy of energy-saving provisions lies a re-opening of higher Corporate Average Fuel Economy (CAFÉ), or miles per gallon, standards. The current 27.5 mpg benchmark for passenger cars and the 20.7 mpg standard for light trucks, SUVs, and minivans have been in place for years. Yet the desire for higher fuel efficiency has long faced a tradeoff against the additional deaths on the road due to more smaller and lighter vehicles. That policy dilemma is not all that different this year either.

Tech Central Station Host James K. Glassman recently spoke with Rep. Joe Knollenberg (R-Mich.) about how CAFÉ affects the marketplace for cars and carmakers, but most of all, how passenger safety suffers. "[I]f CAFE were a chemical that even cost a few dozen lives a year," said Knollenberg, "it would have been banned a long time ago." The fifth term Michigan Republican explained that higher miles per gallon requirements affect all vehicle types.

The fuel efficiency-safety debate has expanded, though. It now includes discussion about CAFÉ`s role in combating global warming - a development Knollenberg does not welcome. "[I]t`s beginning to change the mind-set of people who previously in Congress voted against CAFE increases, who are now saying, `Well, whoops, I`m looked upon by the environmental community and extreme environmentalists as being less than green, so I`ve got to help myself and protect my record and begin to think about voting green.`"

James K. Glassman: A mid-July leak to the New York Times claimed that a National Academy of Sciences study on CAFE standards would find little problem with the safety concern that was posed by having higher standards. Right now, the easy target is SUVs, but CAFE standards first established in the mid-`70s eventually led to the demise of the family station wagon. What fate awaits the family minivan or the SUV if CAFE standards are raised?

Rep. Joe Knollenberg: I believe CAFE standards will, in fact, impact negatively all classes of vehicles because it forces the automakers to produce vehicles that Americans don`t necessarily like. Also, it leads to a problem of downsizing vehicles to meet those CAFE standards, which results in a vehicle that`s more vulnerable, and thus, potentially contributory to deaths. And if people looked at this as a factor of risk, if they compared, made a link, between CAFE and risk and discovered that lives are being lost. People can estimate and they have estimated all kinds of figures. But if lives are being lost, then there ought to be some compelling reason to adjust that standard, that mandate.

Glassman: So you have no doubt that safety will be compromised?

Knollenberg: Safety will be compromised. You`re familiar with the NHTSA [National Highway Traffic Safety Administration] survey sometime back that indicated every 100- pound reduction in the average weight of an automobile would result in 302 additional highway related deaths. Now that`s a big number. As mentioned in the Wall Street Journal, if CAFE were a chemical that even cost a few dozen lives a year, it would have been banned a long time ago.

Glassman: Right.

Knollenberg: So I believe that the automobile would never have been invented if CAFE were around at the beginning, because it wouldn`t have been able to meet the tests, standards or requirements. But in any event, here we are dealing with a standard that walks away from what people want, and forces the automakers to produce vehicles that, frankly, people don`t want to buy.

Knollenberg on CAFE and Carmakers...

"I think it also forces the auto industry to put technology in place before it has actually matured to being commercially viable. And that`s a big problem, as I see it."

Glassman: In the past the justification for raising CAFE standards was to conserve energy. Of course, it seems to me, the best way to conserve energy is by consumers making decisions on their own about whether or not to buy gasoline if it becomes higher priced. But now we`re hearing arguments based on global warming. How important is the global warming argument that you`re hearing in the House?

Knollenberg: I believe the global warming debate-- if you want to call it that -- has become more a case of one side saying the sky is falling and we have to do something tomorrow. And if we don`t, we`re going to meet with these terrible consequences, all of which, you know have not been proved yet. The science is mixed on this, but the economists are all on the same side. They know that this will cost money, and even the Clinton Administration people are now saying yes it will cost money. What we have instead of a debate, we have some hysteria that has been generated by folks who believe more in computer models than actually believing in sound science, peer-reviewed science. They rushed to the altar of succumbing to this terrible thing that`s coming and are trying to force adjustments on the makers of vehicles and also force people, in many cases, to buy a vehicle that they really wouldn`t prefer. I think it also forces the auto industry to put technology in place before it has actually matured to being commercially viable. And that`s a big problem, as I see it.

It`s the government mandate that we`d like to say no to and let the marketplace move as it always has. It will make the proper corrections in our judgment. We can deal with emissions. As you know, and I think it is a well- accepted fact now, that the 1991 automobile is about 98% cleaner than its brother back in the `70s. So we have moved a long way already. It`s a case now of continuing to improve. But let`s do it in the framework of the market while not being forced by government.

Glassman: But you think that the argument about people who are concerned about global warning, misguided in my estimation and I think yours, those folks are using global warming as an argument for raising CAFE?

Knollenberg: Oh, they are indeed. And, in fact, it is also (this is the disturbing thing) it`s beginning to change the mind-set of people who previously in Congress voted against CAFE increases who are now saying, "Well, whoops, I`m looked upon by the environmental community and extreme environmentalists as being less than green, so I`ve got to help myself and protect my record and begin to think about voting green." So when you look at it, there`s some people from some very conservative regions of the country that would like to have a free vote.

Glassman: Right.

Knollenberg: They`re talking about voting for CAFE, just a little bit of CAFE as they say, to kind of clear them up with some of the folks back home.

Glassman: Right. You know people who are in favor of raising CAFE standards point to the fact that the increase in CAFE standards has helped make American automobiles more fuel- efficient. In other words, they`re saying that without CAFE standards, miles per gallon would not have increased as much as they have over the last 20 years. What`s your response to that point?

Knollenberg: I frankly think they would have gotten there anyhow. But here`s what I would also point out: the fact that these vehicles are doing better, they`re more efficient. The other side of that story, if you`re talking about conservation of energy, is that people realize once they`ve saved a little bit of money on a tank of gas they can drive a little farther. So the actual consequence of CAFE was to raise the amount of miles that people drove, which ruled out any energy savings and still does. They were entitled to drive a little more with a smaller car because it was already paid for, so to speak. So I think CAFE really didn`t change the consumption of fuel at all. It did obviously bring down the consumption of the gasoline per, say, 10,000 miles, but people drove more.

Alternative Routes to Conservation

Glassman: President Bush has called on America to have an energy plan. How do you respond to critics who might say that hiking CAFE standards helps to fill out the conservation side of such a plan. I know you just said that people have driven more because of increased mileage that cars get, but at this point if we do need conservation, isn`t this a good way to get it?

Knollenberg: I think you can get conservation a number of ways. The bill that we passed last week in the House on energy includes a feature that does change the fuel consumption, the energy consumption through the year 2010. And it doesn`t exactly impose a CAFE standard. It simply does this: it will promulgate a way to reduce consumption, get this, 5 billion gallons of gasoline for SUVs and light trucks. That`s in the bill now. That could be modified. There will be amendments, but I think that is . . .

Glassman: How does it do that?

Knollenberg: Well that`s an interesting question [laughter]. I don`t think they have figured out how they`re going to do that. It`s such a general thing that they`re hoping that they can move it through as a way to avoid the amendments that will increase it to 30 miles a gallon or 40 miles a gallon. And by the way, those are out there. Someone will offer such an amendment. They already have in committee. But it`s my view that we`re going to be voting on reducing gas consumption. I don`t know how you monitor that. I don`t know that that`s been thought out very carefully. Perhaps that`s where the Senate and the House will get together to style something that will be acceptable. But there`s no conclusion, no resolution on that just yet.

Glassman: Well, the only economically efficient way to get people to reduce their gasoline consumption is to raise the taxes on gasoline. Is that in the cards?

Knollenberg: No. It is not at this point and I would oppose that strongly. I think most people who have an anti-tax posture, and certainly those people who`ve consistently stayed with the anti-Kyoto point of view and the anti-global warming point of view, would rationalize that instead of taxing people more we ought to be talking about reducing taxes as much as possible. It would be opposed strongly, I can tell you that, by, I believe, a bigger number of members than some effort to raise taxes. That certainly is the European style, as you well know.

Glassman: Right. And, of course, the Europeans also put taxes on their automobiles. In Denmark, they have a 105% tax when you buy the car. Instead of $30,000, it costs you $60,000.

Knollenberg: And they do the same in Japan and Korea and other countries. But I think that would be an invalid way to move.

Glassman: Let me switch gears here and ask you about Social Security. I know you are on the House Republican Policy Committee panel on retirement security, is that right?

Knollenberg: I am.

Glassman: I just wanted to get your initial reaction to the preliminary report of the Social Security panel that President Bush put together. It`s under attack from Democrats who are essentially saying, "Well, the situation is not really as bad as this group is saying that it is." What is your response?

Knollenberg: I`ve always felt that the Social Security program should be enhanced by moving in the direction of taking part of those FICA monies and putting them into some kind of private investment. Now, right now, you wouldn`t say that`s a very good thing to do, but year in and year out and in the long term, I think it is desirable.

I personally have not seen the actual report or read it, but my view is that the Bush Administration is on the right track here. I think they should continue to stress that we do need to fund the whole Social Security program. In some way we should enhance it by using the private method, the private route.

But when it comes to the revenue that comes in through Social Security I think that we have to look at the facts down the road -- is it 10 years, 15 years, 20, 25 years? It`s out there somewhere, where we`re going to have a problem particularly with the Baby Boomers coming on stream. And they`re beginning to.

So I look forward to that debate. But I think strongly that we should look at giving the person some control over his own destiny.

Glassman: Congressman, as my last question, just to go back to something you said earlier, I want to make sure that everyone understands it. I had asked you about SUVs because that seems to be what everybody is concentrating on as far as miles per gallon and CAFE standards are concerned. But you were saying that really all new car buyers in the future would be affected by a change in CAFE standards. Can you explain that?

Knollenberg: Conceivably, yes. This is one of the hardest things in the world to explain because CAFE standards` effect -- it`s a geometric impact, not an arithmetical impact. I guess that`s as far as I`ll go with the mathematics. But in the end you cut consumer choice when you introduce dramatic increases in CAFE because consumers won`t be able to get the vehicle they want. I think overall it hurts, of course, the SUV crowd. It hurts the Suburban crowd. It hurts the big truck crowd, or the truck crowd if you will, more than perhaps the others.

It comes back to the fact, though, that it`s the government placing mandates that impact the marketplace and impact the number of vehicles that a domestic maker in particular can offer the public when the public says it would like to have one of those others. And so, it will have that kind of an impact on the car buyer, whether he`s at the small end of the vehicle range or on the larger side. There`s going to be less choice, less availability, and less flexibility for the buyer.

Glassman: And the buyer is completely aware of the mileage that his or her own vehicle gets, and if the cost is quite high, then the buyer will cut back on the use of gasoline. That`s a much more efficient way to do it than to, in effect, limit the choices that the consumer has.

Knollenberg: Precisely.

Glassman: Well, I really appreciate this, congressman.

Knollenberg: Very good. Jim, thank you very much.


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