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Big Oil Quietly Cheers Proposed U.S. Freeze on Fuel Economy
The White House plan to freeze future fuel economy rules in 2020 amounts to a revenue hike of roughly $200 billion for oil producers over the next 16 years, Bloomberg News says.
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The White House plan to freeze future fuel economy rules in 2020 amounts to a revenue hike of roughly $200 billion for oil producers over the next 16 years, Bloomberg News says.
The freeze would hold future fuel economy targets at about 37 mpg rather than hiking them to 47 mpg by 2025. The greater fuel consumption that results would boost U.S. oil demand by about 500,000 barrels per day by early 2030, or about 3% of projected consumption.
The U.S. is expected to become the world’s largest oil producer by 2023, according to the Paris-based International Energy Agency. Achieving that position would largely erase the country’s dependence on foreign petroleum, a fear that has driven the quest for higher fuel economy standards.
Oil refiners applaud the Trump administration plan for reflecting “market realities, industry progress and consumer preferences.”
Opponents to the freeze say the move mainly gives the oil industry a bonanza of stronger sales. Bloomberg cites research by the New York City-based Rhodium Group that says the Trump plan would cost consumers a cumulative $193 billion-$236 billion in greater spending on fuel between now and 2035.
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