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Executive Summary

Retail gasoline prices have hit $2.00 a gallon across the country, and the U.S. remains dangerously dependent on oil. Consumers pay a high price at the pump for our shortsighted energy decisions, and the economy is beginning to feel the weight of burgeoning energy costs.

The best way to reduce our dependence on oil and save consumers money at the pump is to make cars go farther on a gallon of gas. Today, fuel economy is at a 24-year low of 20.8 miles per gallon (mpg). The National Academy of Sciences has stated that we already have the technology to make cars get 40 mpg. The big oil companies and automakers continue to fight this progress; in fact, while consumers are paying more at the pump, oil companies are recording huge profits. In 2004, the top ten oil companies enjoyed net profits of $100 billion, an increase of more than 30 percent from 2003.

Congress and the Bush administration have done nothing to address these problems. In May 2001, the Bush administration released its national energy policy, the product of Vice President Cheney’s energy task force, which outlined a plan that continues to rely heavily on oil, other fossil fuels, and nuclear power to meet the country’s energy needs. For the last four years, the Bush administration has tried to push its energy plan through Congress while actively opposing proposals to significantly increase the fuel economy of cars and light trucks. In April 2005, the House passed an energy bill that gives new tax breaks to the oil and gas industry while doing nothing to make cars go farther on a gallon of gas. The Energy Information Administration (EIA) concluded that the policies outlined in this bill would increase U.S. imports of foreign oil by 85 percent by 2025 and do nothing to lower gasoline prices in the short or long-term. In fact, the president recently admitted that the bill “wouldn’t change the price at the pump today.”

Similarly, the Bush administration’s proposal to drill in the Arctic National Wildlife Refuge would do nothing to solve our energy problems. EIA has reported that drilling in the Arctic Refuge would not have any impact on world oil prices; the U.S. Geological Survey estimates that the oil found in the Arctic Refuge would meet the energy needs of the U.S. for less than one year. Increasing the fuel economy of our cars to 40 mpg, however, would save at least four times as much oil each day by 2020 as the Arctic Refuge would produce each day at its peak.

In May 2001, when announcing his national energy strategy, President Bush had the opportunity to take a bold step forward and increase the fuel economy of cars and SUVs to 40 mpg by 2012. If he had, consumers and the U.S. economy already would be reaping the benefits as more efficient cars entered the market. In 2005 alone:

• The U.S. would be consuming 350,000 barrels of oil less per day. This is more than half of our current imports from Iraq.
• Consumers would be saving more than $5 billion at the gas pump, about $300 per new vehicle on the road.
• The U.S. would be offsetting 23.9 million tons of carbon dioxide, the primary global warming gas. This is the equivalent of removing four million average vehicles from the road.

After 2005, as more cars meeting the new standards replaced older, less efficient cars, the benefits would have grown even larger.

President Bush should not wait any longer. In order to curtail America’s oil dependence and save consumers money, President Bush should stop pushing an energy policy that will not reduce our dependence on oil or save consumers money at the pump. Instead, he should pick up a pen and increase fuel economy standards to 40 miles per gallon.