Bush Administration Announces Revised Corporate Average Fuel Economy Regulations.

New fuel economy regulations focus on large SUV's.

Whenever new regulations regarding the auto industry are imposed, it reminds me of two parents arguing about their child. One parent wants to make an unpopular decision that will better their son or daughter in the long run. The other doesn't see any long-term gains, just short-term pain. The child usually takes the side with no short-term pain.

Last week the Bush Administration announced revised Corporate Average Fuel Economy (CAFE) regulations that now include large SUV's. Under the new rules, light trucks and SUV's must average 24 miles per gallon by 2011, up from 21.6 mpg. Automakers say these new regulations pose serious challenges. They also note that prices will rise a few hundred dollars per vehicle as a result. The Bush Administration claims the new regulations will help reduce America's dependence on foreign oil so it's worth the price.

Like previous regulations, an automaker can use vehicles that get above the requirement to offset those that get below. Overall, an automaker still needs to improve the fuel mileage of most vehicles or they have no chance of meeting the new standards.

Today many new technologies improve power and reduce fuel consumption. Improved aerodynamics, reduced weight and more efficient drive trains will help achieve these gains. As automakers point out, there is a price to pay for all of these impending improvements.

Although these are the biggest changes to the Corporate Average Fuel Economy guidelines we've seen in a long time, they are long overdue. Over the last 10 years we've seen a dramatic rise in large SUV sales like the Cadillac Escalade, Lincoln Navigator and Hummer H2. As these vehicles have become more commonplace, it's time that they meet more strict regulations.

We've come a long way since the 1970's when the government made their first big push to increase fuel economy. Today, our cars are cleaner, more fuel efficient and more powerful. But we wouldn't have any of these improvements unless the Government took the action it took. Whenever there is a challenge, automakers can turn to their best and brightest for the solutions.

As it stands right now, large SUV's don't make much sense. Hopefully these new guidelines will force automakers to downsize their offerings and push customers into more sensible vehicles. And it's best to get this done before the next spike in fuel prices. When prices spike due to a supply issue, vehicles like the Hummer H2 will become the hot potato that nobody will want to be caught with. Who's side will you be on then?

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