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US auto rule freeze to boost oil use 500,000 b/d

30 Jul 18, 16:12 – Crude oil, Emissions, Oil products, Politics

Washington, 30 July (Argus) — President Donald Trump’s plan to freeze efficiency and greenhouse gas standards for cars and trucks will save drivers “staggering amounts of money” even as they spend billions of dollars more for fuel, according to a leaked draft of the proposal.

Locking the efficiency standards in place after 2020, as the draft proposes, would increase oil consumption by 500,000 b/d. Drivers would spend an additional $133bn on 1.7bn bl of fuel for vehicles manufactured over the next decade. The draft says conserving fuel is no longer as important as it once was because of rising domestic oil production.

“The world has changed, and the need of the US to conserve energy, at least in the context of the [fuel-economy] program, has also changed,” according to the draft, which leaked on 27 July.

The administration contends consumers are better off keeping the fuel-economy standards at 37 miles/USG, rather than having them rise to 46.7 miles/USG by 2025 under existing rules. That is in part because the draft proposal expects this will knock $2,000 off the purchase price of a new vehicle, accounting for the majority of the $215bn in anticipated net savings.

The proposal, from the US Environmental Protection Agency and the US National Highway Transportation Safety Administration, represents an early draft of the administration’s plan to overhaul fuel-economy and greenhouse gas rules for cars and trucks. The White House began reviewing the proposal in May and it is unclear what changes have been made since then.

The proposal could be unveiled as soon as this week, according to industry officials. But the timeline has previously slipped because of last-minute debates about the rule.

The leaked draft does not provide a detailed accounting of how quickly oil consumption would reach 500,000 b/d. US cars and trucks are projected to consume 8mn b/d by 2020 and 6.3mn b/d by 2030, if the existing fuel-economy standards former president Barack Obama finalized six years ago were to remain in place.

Relaxing the standards will cause petroleum use from US cars and pickup trucks to increase by 4pc by 2025 and 9pc by 2035, according to the draft. There will be a similarly sized increase in greenhouse gas emissions, equivalent to 810mn metric tonnes of CO2. The administration says this will translate into a 0.003º C increase in global temperatures by 2100