Tuesday, September 02, 2008

EPA: DOT doesn't have a clue about gas prices

EPA: Transportation Dept off base on fuel estimate

WASHINGTON (AP) — The Environmental Protection Agency says another arm of the Bush administration may be low-balling the economic benefits of increasing fuel economy standards for cars and trucks.

Echoing criticism previously voiced by Democrats and environmentalists, the EPA said in comments filed with the Transportation Department that the department would have been better off using higher estimates for future gasoline prices when it proposed increasing the average fuel economy of all vehicles to 31.6 miles per gallon by 2015.

The proposed fuel economy increase was based in part on estimates that gas would range from $2.04 a gallon to $3.37 a gallon, averaging $2.42 a gallon in 2016.

"EPA has several concerns with the methodology used to determine the relative benefits and costs of the alternatives analyzed," Susan Bromm, director of EPA's Office of Federal Activities, said in a letter last month to DOT....

Congress last year required the National Highway Traffic Safety Administration — an agency within DOT — to set mileage standards at the "maximum feasible" level each year, reaching a minimum of 35 mpg by 2020, a 40 percent increase over current standards.

If the highway administration uses a higher estimate for gas prices in its analysis, it could make a more cost-effective case for raising the requirements beyond 31.6 mpg by 2015.

Gas price estimated by NHTSA "are more optimistic than I think any reasonable person would be in this era," said Frank O'Donnell, president of Clean Air Watch.

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