FOR IMMEDIATE RELEASE: January 24, 2007
Following State Of The Union, Schumer Reveals Raise In Cafe Standards Could Have Saved Upstate NY $2.4 Billion – Announces New Energy Policy Overhaul
Had the Feds Mandated Higher Mileage Standards for Cars and Trucks in 2001, Upstate New Yorkers Would Have Consumed One Billion Fewer Gallons of Gasoline by 2012, Saving Drivers At Least $2.4 Billion
With New Leadership in Congress, Schumer Announces Push for Long Overdue National Energy Policy Overhaul -- Legislation to Raise CAFE Standards, Increase Domestic Production, and Repeal A
On the heels of last night’s State of the Union Address, Senator Charles E. Schumer today announced his plan to overhaul national energy policy in the 110th Congress and released a new report showing that, had the federal government gradually increased Corporate Average Fuel Economy (CAFE) standards starting in 2001, upstate New York drivers would have consumed nearly one billion fewer gallons of gas, saving them more than $2.4 billion by 2012. After this summer’s dramatic spike in oil and gas prices, Schumer said that the federal government is years behind in improving fuel economy standards, as the average vehicle on the road had better gas mileage in 1986 than it does now. Today, Schumer announced new legislation to raise CAFE standards, increase production, and repeal all big oil company tax breaks and direct the savings toward alternative energy research and development.
“The failure to overhaul America’s energy policy not only threatens our national security, but it’s put a deep hole in our wallets,” Schumer said. “The fact that CAFE standards have remained basically level for more than two decades shows that we have not done nearly enough to promote conservation in this country. In the age of sky high prices, we need to aggressively find ways to wean ourselves off foreign oil, for our environment, for our security, and for our bottom line.”
During last night’s State of the Union Address, President George W. Bush announced a goal of slashing gasoline consumption by 20 percent by 2017 by increasing the amount of ethanol and other alternative fuels the federal government mandates must be produced. The rest of the reduction he said will come from raising fuel economy standards for passenger cars.
Schumer said that while support for an increase in CAFE standards is very important and a welcome announcement, actually raising the standards significantly is long over due. Schumer today released a new report showing that had CAFE standards been raised incrementally starting in 2001 up to 36.1 miles per gallon by 2012, upstate New York drivers would have consumed 972 million fewer gallons of gasoline, saving drivers $2.353 billion total in the age of sky high gas prices. Below is how the numbers break out across upstate:
• Drivers in the Capital Region would have consumed 138,546,658 fewer gallons of gasoline from 2001 to 2012 had CAFE standards been raised incrementally starting in 2001. This would have saved drivers $335,282,913.
• Drivers in Central New York would have consumed 122,596,864 fewer gallons of gasoline from 2001 to 2012 had CAFE standards been raised incrementally starting in 2001. This would have saved drivers $296,684,412.
• Drivers in the Rochester -- Finger Lakes region would have consumed 155,682,646 fewer gallons of gasoline from 2001 to 2012 had CAFE standards been raised incrementally starting in 2001. This would have saved drivers $376,752,004.
• Drivers in the Hudson Valley would have consumed 228,867,783 fewer gallons of gasoline from 2001 to 2012 had CAFE standards been raised incrementally starting in 2001. This would have saved drivers $553,860,035.
• Drivers in the North Country would have consumed 72,295,562 fewer gallons of gasoline from 2001 to 2012 had CAFE standards been raised incrementally starting in 2001. This would have saved drivers $174,995,261.
• Drivers in the Southern Tier would have consumed 87,430,219 fewer gallons of gasoline from 2001 to 2012 had CAFE standards been raised incrementally starting in 2001. This would have saved drivers $211,581,131.
• Drivers in Western New York would have consumed 167,294,384 fewer gallons of gasoline from 2001 to 2012 had CAFE standards been raised incrementally starting in 2001. This would have saved drivers $404,852,409.
Studies show that the technology is readily available to easily and safely increase fuel efficiency to at least 35 miles per gallon in passenger cars and light trucks, but the federal government has not mandated increases to CAFE standards for passenger cars in decades. In 2006, CAFE standards for light trucks were adjusted for the first time since 1979 to apply a 21.6 mpg to SUVs, pickup trucks and Minivans, but standards for passenger cars have not changed since 1986. CAFE standards for cars are currently 27.5 mpg.
“The quickest, most efficient way to reduce gas imports and bring down prices is to increase fuel economy standards,” Schumer added.
Schumer today also said that in order to stabilize oil and gas prices and reduce America’s dependence on foreign oil; the federal government must overhaul its energy policy toward conservation, development of alternative fuels, and tax breaks given to major oil companies.
A preliminary study by the RAND Corporation found that the current pace of renewable energy development could reduce projected oil consumption by only 10 percent by 2025. The study says that raising the use of renewables to 25 percent of all U.S. energy consumed would reduce U.S. reliance on oil by double that or roughly the equivalent of imports from Saudi Arabia and Venezuela.
Schumer said that at the same time that American consumers are suffering under high gasoline prices, especially during the summer months, oil companies continue to reap record-breaking profits with their executives receiving multi-million dollar retirement packages. There is no reason to continue tax policies that provide further tax windfalls to these companies. Moreover, investments in renewable energy production and efficiency have higher returns in terms of jobs created than investments and subsidies for in natural gas production. According to the Apollo Alliance, investing in renewable energy creates four times as many jobs per megawatt of installed capacity as natural gas generation. Apollo also reported that every $1 million invested in energy efficiency creates an estimated 21.5 jobs, compared to 11.5 new jobs for new natural gas generation. In response, Schumer today unveiled his energy priorities for the 110th Congress in order to overhaul the nation’s energy policy.
• Increase CAFE Standards Incrementally of the Next 10 Years and Promote Domestic Production at the Same Time: Schumer announced he will introduce new legislation that will increase CAFE standards for passenger cars and trucks, while actively working to utilize domestic sources of oil and natural gas. The legislation would increase CAFE standards for all cars from roughly 25 miles per gallon (mpg) right now to 35 mpg for all cars by model year 2017. Senator Schumer’s legislation will also allow for additional exploration and drilling of energy resources in domestic areas, along with significantly increased environmental protection for these areas to encourage new production.
• Repeal Oil Company Tax Breaks and Direct Savings Toward Alternative Energy Research: Schumer announced new legislation that would repeal all oil company tax breaks and direct the money saved toward the development of alternative fuels in upstate New York and across the country. The new Schumer legislation would eliminate all tax breaks for the major integrated oil companies with revenues in excess of $1 billion including (1) repealing the domestic production tax deduction; (2) eliminating the last-in, first-out inventory (LIFO) accounting method that allows oil companies to low ball the value of their inventory; and (3) denying the foreign tax credit when the major oil company received an economic benefit from a tax paid to a foreign government. All of these changes and other tax breaks in the bill could raise $3-4 billion annually with the savings directed toward new research into alternative energy, or energy R&D.
• Promote Ethanol Production in Upstate New York: Schumer announced he is going to reintroduce his Ethanol Stimulus Act that would create a new tax credit designed to spur ethanol production in states that consume more than two percent of U.S. gasoline, but produce less than two percent of U.S. ethanol. For new production facilities in these states, this bill would give new producers in these states a tax credit of 20 cents per gallon on the first 50 million gallons produced a year, as long as the plant’s total annual ethanol production does not exceed 150 million gallons. The legislation would give tax breaks to companies looking to build ethanol plants in New York California, Texas, and Florida.