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Using Miles Per Gallon Ratings To Reduce A Nation’s Oil Consumption Is An Indirect Approach

by August 2, 2011
ap_video

AP Video Coverage of President Obama's Announcement

The new agreement between President Obama and automakers, nearly doubling fuel efficiency for automobiles by 2025, will have a direct impact on oil consumption by the U.S. automobile fleet. Yet, if this aggressive goal is fueled by a desire to maximize reductions in oil consumption, then it would be more useful to measure our performance with a direct indicator of oil consumption: gallons per mile (GPM), the inverse of our standard metric, miles per gallon (MPG).

The problem is that using MPG as a guide for saving fuel is very dependent on the starting point: replacing a gas hog with a somewhat better performer can save more fuel than replacing a car with good gas mileage with one that is even better. This was laid out nicely in a 2008 Science paper by Richard Larrick and Jack Soll (see their MPG Illusion website, too). Here’s a good explanatory video Duke University produced at the time the article was published.

Let’s take a look at several scenarios where one would change out a vehicle with one having 50% higher fuel efficiency. Each has a starting fuel efficiency (in blue) and an ending efficiency (in red). Then, taking the average for Americans, the second graph shows the fuel savings for 10,000 miles driven. It is quite apparent that there are much larger savings in fuel used by replacing vehicles that currently have the lowest MPG ratings.

mpg-scenarios

Here’s a quick example using my family’s two vehicles: a 2000 VW Golf TDI and a 1999 Jeep Cherokee. For the sake of argument, let’s say that we log 5000 miles per year on both vehicles. The graph below shows the fuel savings were we to replace either vehicle with one that gets 50% better fuel mileage. If we were using these vehicles equally, then it clearly would be a priority to replace the Jeep with a more efficient model.

thought-experiment

Would this have been more intuitive had we thought about the two vehicles in GPM terms? I believe so. The Jeep requires 7.1 gallons per 100 miles, and the VW Golf requires just 3.5 gallons of fuel per 100 miles. Thus, we can achieve more fuel savings by replacing the Jeep with a comparable vehicle to the VW Golf than we’d ever be able to save by improving on the Golf.

Returning to the scale of a country, and specifically one that aims to minimize its use of oil for cars, it would make sense to focus first on those vehicles, like our Jeep, that have high GPM values. That said, it would be smarter still to focus on replacing vehicles that both have high GPM and are used heavily. In other words, a family’s Jeep that sits at the curb most days, might not be a high priority for replacement.

Using MPG standards to make the auto industry produce vehicles that are capable of saving the country fuel is an indirect approach to curtailing use of petroleum. As pointed out in a USA Today editorial, taxing the amount of fuel consumed would be a more direct, though politically painful, approach.


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