ENERGY

ENERGY
Bad Policy Fuels High Prices

As millions of Americans hop in their cars for vacation, the average price for a gallon of gas has spiked to $2.60 -- and many people are paying more than $3.00 per gallon to fill their tank. While most everyone is feeling the pinch, "for many lower-income people -- often those who work in service jobs or are looking for work -- each new bump up in price means altering daily routines, spending less on clothes and food, and keeping the kids at home instead of driving them to the pool or friends' houses." A big part of the problem is that, despite huge advances in technology, "America's cars and trucks are significantly less efficient, on average, than they were in the late 1980's," driving up demand, and the price, for fuel. Meanwhile, the Bush administration has staunchly resisted efforts to help solve the problem by improving fuel efficiency standards. Now, all Americans are paying the price.

BUSH ADMINISTRATION CONCEALS FUEL ECONOMY REPORT: In late July, "the Environmental Protection Agency made an 11th-hour decision...to delay the planned release of an annual report on fuel economy." The decision to block the release of the report was made "because it would have come on the eve of a final vote in Congress on energy legislation." The study showed that "the average 2004 model car or truck got 20.8 miles per gallon, about 6 percent less than the 22.1 m.p.g. of the average new vehicle sold in the late 1980's." Specifically, "the average 2004 model sold by Nissan, Hyundai and Volkswagen was at least a half-mile a gallon less fuel-efficient than in the previous model year, a sharp drop." (A report by Environmental Defense provides details for all major manufacturers.) That wasn't news the Bush administration wanted public to hear because the bill "largely ignore[d] auto mileage regulations." Several Senators offered amendments "to strengthen fuel economy standards for S.U.V.'s, minivans and pickups" but they were all rejected. Bush signed the energy bill, which gave away billions to the energy industry, on August 8. Even the administration acknowledges the bill will do nothing to reduce gas prices.

FAST, FURIOUS AND GAS-GUZZLING: The failure to mandate the production of more fuel efficient vehicles is a giant missed opportunity. There have been "leaps in engine technology over the last couple of decades" that could make cars much more efficient. But in the absence of stricter efficiency standards, these gains "have been mostly used to make cars faster." Also, since the early 1980s, "average new vehicle weight has risen to about 4,000 pounds today, from about 3,200." During that time "the horsepower of an average engine has roughly doubled over two decades, trimming four seconds from the time it takes for the average vehicle to accelerate from zero to 60."

KEEP ON TRUCKING: The key to avoiding fuel efficiency standards is to classify every new and trendy "crossover" vehicle as a truck. Light trucks "are held to a lower [average fuel efficiency] standard—20.7 mpg as of model year 2003, compared to 27.5 mpg for cars." Manufacturers are also moving vehicles that were once classified as cars to the truck class "to sell more of the large trucks on which profit margins have been so high." Today "S.U.V.'s and other light-duty vehicles account for 40 percent of the nation's oil use." With only the smallest cars remaining in the "car class" there is no pressure to improve the efficiency of those vehicles either. President Bush and the Congress had the opportunity to close these loopholes and improve overall efficiency in the energy bill, but didn't do it. New regulations set to be released later this month will create up to five classes of vehicles based on height and width. Dan Becker of the Sierra Club says the upcoming proposal is "an invitation to game the system."

BUSH PROTECTS MASSIVE LOOPHOLE FOR HUMMERS: In 2003, President Bush proposed extending "fuel economy regulations to include Hummer H2's and other huge sport utility vehicles," which are now completely exempt. As gas prices soar to record levels, the administration has abandoned the proposal. The exemption applies to vehicles weighing over 8,500 pounds. When it was created, "vehicles of that weight were generally used for commercial purposes, but now hundreds of thousands sold each year are intended for family use." The exemption, along with potential tax breaks for consumers who purchase them, create "powerful incentives to produce such vehicles."



ECONOMY -- CORPORATIONS EARN MORE SO YOU CAN EARN LESS: The Christian Science Monitor explains why "a boom in corporate profits has not yet created a job market that makes workers feel secure." The simple explanation is: "Hiring hasn't skyrocketed. Worse, wages are stagnant." The article reports that the latest numbers from the Labor Department actually show average weekly earnings for U.S. workers have fallen by 0.5 percent in the past year, after adjusting for inflation. Similarly, the LA Times reported that, "For the first time in 14 years, the American work force has in effect gotten an across-the-board pay cut." Not since the 1990-1991 recession has inflation increased at a faster pace than wage growth. Boston Globe columnist Tom Oliphant writes that these disturbing economic trends demand the attention of progressive politicians who should raise several issues, including "particularly long overdue increases in the minimum wage and the earned income tax credit."

LABOR -- AT NORTHWEST, LABOR'S LOVE LOST: In what cannot be good news for unions, Northwest Airlines rode out a full weekend of flights, despite the fact that its mechanics union is on strike. How did the airline do it? Apparently, Northwest had been planning for well over a year, and had taken pains to create a team of "temporary mechanics," get the support of other unions, and even consult with the White House. If the airline continues to cope with the strike, it could, many speculated, set a new industry precedent and mark a decline in the effectiveness of striking as a labor tactic.

CORPORATE POWER -- BANKRUPTCY LAW FUELING MORE BANKRUPTCIES: On April 20, President Bush signed the new bankruptcy bill declaring, "The bipartisan bill I'm about to sign makes common-sense reforms to our bankruptcy laws. By restoring integrity to the bankruptcy process, this law will make our financial system stronger and better." But the law has in fact fueled the declaration of more bankruptcies, which is only harming our financial system. The New York Times reported this weekend: "Rushing to beat an October deadline when the biggest overhaul of the bankruptcy law in a quarter century goes into effect, rising numbers of Americans have filed for protection in the four months since the law was changed, seeking to have their debts erased." Bankruptcy declarations in America's heartland is increasing by double digits, and nationwide, they are up 12 percent.


VALUES -- THE RIDE ACROSS A "LITTLE SLICE OF HEAVEN": At long last, President Bush and cycling great Lance Armstrong enjoyed an idyllic bike ride across Bush's Crawford, Texas, ranch. The ride, which covered about 17 miles over the course of two hours, reportedly left the president impressed with Armstrong's skills. Ever the joker, Bush presented Armstrong (along with the riders that accompanied the two) with shirts that said "Tour de Crawford." After posing for pictures, the president invited Armstrong and the group to stay for swimming and lunch. In an unrelated story, hundreds of war protesters continue their stay outside of Bush's ranch.