Last month, the Trump Administration announced that it would replace fuel efficiency standards enacted by the Obama Administration in order to make cars safer and more affordable.
The new proposal unveiled by the Environmental Protection Agency and the Department of Transportation would freeze Corporate Average Fuel Economy (CAFE) rules from 2020 through 2026. Under the Obama plan the targets were set to rise each year.
The Trump Administration estimated that the new rules could prevent 1,000 fatalities each year and reduce the cost of a vehicle by more than $2,300. They also claimed that the new rules would have a minimal relative impact on carbon dioxide emissions (probably true), but they acknowledged that the change would result in 2-3% higher oil consumption.
The administration downplayed the impact of increasing oil consumption by an estimated 0.5 million barrels per day, stating in the proposal:
“The U.S. is currently producing enough oil to satisfy nearly all of its energy needs and is projected to continue to do so, or become a net energy exporter. This has added new stable supply to the global oil market and reduced the urgency of the U.S. to conserve energy.”
I strongly disagree with this argument. While it is certainly true that U.S. oil production has soared, and our net imports of petroleum and petroleum products have fallen sharply, they still amount to ~2.7 million BPD.
We import around 10 million BPD of crude oil and products, with about 30% of that originating from OPEC countries. But we also now export a significant amount of petroleum products, as well as around 2 million BPD of crude oil (which is why our net imports are much lower than our crude oil imports).
It isn’t certain that the U.S. will become a net exporter of petroleum and petroleum products, but in any case that’s not a reason to forego conservation. There are economic reasons, national security reasons, and environmental reasons for conserving oil.
Reductions in discretionary oil consumption will either reduce oil imports, or increase net exports. Either scenario will result in an improved overall trade deficit for the U.S. For individual consumers, reducing discretionary oil consumption will keep a little more money in the family budget.
It is also unlikely that the U.S. will be a net exporter long-term. Thus, reductions to consumption will improve long-range energy security, and they will better insulate consumers against oil price shocks.
There are also the environmental issues to consider. Oil is one of the major contributors to rising carbon dioxide concentrations in the atmosphere. Reducing oil consumption is a step we can take toward reining in these emissions.
Further, the production and transport of oil poses a risk of leaks and spills. As a society, we agree to accept these risks when we consume oil, but lowering our oil consumption would reduce the risks.
Finally, it goes without saying that oil is a finite resource. In many applications, there are no economical substitutes. Conserving oil will increase the lifetime of the resource, and allow us more time to develop economic substitutes.
So do what you can to conserve oil, despite what the President says.