Friday, March 9, 2012

Obama Claims His New Auto Standards Will Save $8,000 a Year in Fuel Costs BUT Wait -- the Average Yearly Fuel Cost for a Car Is Only $3000 Now?

President Obama told a crowd in Mount Holly, NC on 7 March 2012: “Now, because of these new standards for cars and trucks, they’re going to — all going to be able to go further and use less fuel every year. And that means pretty soon you’ll be able to fill up your car every two weeks instead of every week — and, over time, that saves you, a typical family, about $8,000 a year.”

Crowd response: “We like that.”

OBAMA: “You like that, don't you?”

Crowd: “Yes!”

OBAMA: “Eight thousand dollars — that's no joke. … It looks like somebody might have fainted up here.”

People in the crowd certainly were fainting because they thought the President had just committed to giving every car owner a $5000 Government check for just driving because they knew the average annual cost for gasoline is less than $3,000 (just ask the Consumer Federation of America).

Obama then went on to claim: “Thanks to new fuel efficiency standards we put in place, they’re building cars that will average nearly 55 miles per gallon by the middle of the next decade. That’s almost double what they get today. That means folks will be able to fill up every two weeks instead of every week, saving the typical family more than $8,000 at the pump over time.”

In fact, according Obama’s own National Highway Transportation Safety Administration calculates a driver would have to keep his passenger car 26 years to realize that much fuel savings. How many people do you know that drive the same car for 26 years?

Although Obama made this outlandish claim a few days ago, the White House has made NO attempt to correct the record or even issue an explanation although several news organizations have called him on his “Presidential error.”

Now if he had said “$8,000 at the pump over 26 years” he might have been more accurate but then he might have neglected to mention the costs to the consumer of compliance with his new rules.

Obama’s standards are coming in two phases. The first, for model years 2012-2016, will increase the average cost about $950 while saving ~ $4,000 in fuel so the net savings is about $3,000 over the 26 years. The second set for model years 2017-2025 will add $2,200 to the cost of a car while reducing fuel costs by ~$6,600, for a net lifetime savings of $4,400. Here the analysis presumes gasoline at $3.42 before taxes but everyone knows Obama wants gas at European prices so at $8 a gallon his numbers might be a little more accurate.

For complicated reasons, the predicted fuel savings from the two rules might amount to a MAXimum of $8,000 while the cost of the rules cost about $3,000 a MAX savings of $5,000 over the 26 year but for the 17-25 standards it will take several years if ever to just recoup the higher vehicle cost through gas savings.

For perspective, more than $4,700 of the added cost of a 2009 car is already due to added safety and emission equipment so these rules would add about $3,000 on top of that according to government estimates BUT interestingly the Center for Automotive Research analysis calculates the cost of the new equipment would more than wipe out any fuel savings, even with gasoline selling at $6 a gallon – and which of these two “authorities” has the better track record for accuracy. Certainly not Obama’s Government experts!

Increasing fuel economy as a way to reduce greenhouse emissions and reliance on foreign oil is a laudable goal but the president shouldn’t lie about it to convince a skeptical audience he’s “helping” them, or at least once called out on the lie by the media he should “man-up” and issue a correction with an apology!

Then again, lately the dead give away that President Obama is lying is his lips are moving!