U.S. Government Sees Higher Oil Prices Driving Up Fuel Economy

The same high gas prices could spur the penetration of alternatively powered cars and trucks, such as flex-fuel vehicles and plug-in hybrid electric vehicles.

James M. Amend, Senior Editor

July 14, 2010

3 Min Read
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Fuel economy for light vehicles sold in the U.S. could reach an average 43 mpg (5.5 L/100 km) by 2035, and alternatively powered vehicles may account for 20% of the cars and trucks sold, a new government report reveals.

However, such a jump from 27.6 mpg (8.5 L/100 km) today would require substantially higher petroleum prices, the U.S. Energy Information Admin. says in its annual energy outlook.

The government bases it prediction on oil costing $210 a barrel, up from an average of $61.66 in 2009 and $78.69 through the first six months of this year, as well as sales of 19 million vehicles with a mix tilting 69% towards passenger cars from 53% in 2009.

Under such a scenario, the average fuel economy for light vehicles would rise to 43 mpg, according to EIA.

But pricey crude alone won’t drive fuel economy higher, says Paul Holtberg, a spokesman for the EAI’s annual energy outlook. “Oil prices matter,” he tells Ward’s, “but technology and infrastructure matter, as well.”

That means items such as downsized engines with turbocharging and advanced aerodynamics, and greater availability of renewable fuels and electrified-vehicle charging stations.

For example, the government expects turbocharging, supercharging and cylinder deactivation to increase from 5% of light-vehicle sales in 2008 to 57% in 2035.

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Advanced aerodynamics will appear on 99% of all cars and trucks sold, while lighter-weight materials will draw down the weight of an average car to 3,112 lbs. (1,356 kg). from 3,264 lbs. (1,422 kg) in the same timeframe.

The same high gas prices could spur the penetration of alternatively powered cars and trucks, such as flex-fuel vehicles that run on gasoline/ethanol and plug-in hybrid electric vehicles, to nearly 50% of all U.S. sales in 2035.

FFVs will account for 41% of alternatively powered vehicles sold in 2035, the government expects, and 20% of all cars and trucks delivered.

According to Ward’s data, 10.2% of all ’09 model-year light vehicles produced included a flex-fuel engine, up from 6.9% in ’08 and ’07. But given the low penetration of electrified vehicles, FFVs today comprise a lion’s share of the unconventional-vehicle sales.

More flex-fuel vehicles coming, but share of unconventional-vehicle market will diminish.

Although the juicy corporate-average-fuel-economy credit driving auto makers to build FFVs runs out in 2020, the government expects increased availability of the powertrains, as well as more readily available renewable fuel, to help drive their penetration higher.

Among other unconventional vehicles, the EIA report shows micro-hybrid electric vehicles commanding a 53% share of all hybrid-vehicle sales. Standard hybrid-electric vehicles have the second-largest share at 37% of hybrid sales.

PHEVs operating with at least 10 miles (16 km) of fully electric power will account for 9% of hybrid sales and those getting up 40 miles (64 km) of all-electric range 2% of 2035 deliveries.

Today, hybrids account for less than 2% of all light-vehicle sales.

But all bets are off should gas prices remain low, a fear dogging auto makers today as they invest a combined $52 billion in new technology just to meet stricter CAFE rules starting next year and culminating in 34.1 mpg (6.9 L/100 km) by 2016.

Should oil prices reach $51 per barrel in 2035, fleet-fuel economy would hit an estimated 37 mpg (6.4 L/100 km), with cars accounting for 57% of the mix, the government says.

And if oil prices were to hit $133 per barrel the government sees fleet-fuel economy at 40 mpg (5.9 L/100 km), with cars representing 66% of the mix.

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