Fuel economy standards will cost the Highway Trust Fund billions

By David Tanner, Land Line associate editor | Tuesday, September 04, 2012

Fuel economy standards mandated by the EPA will cost the Highway Trust Fund billions in the coming years according to a road builders’ group that outlined a worst-case scenario in a report published Aug. 29.

The American Road & Transportation Builders Association estimates that past and present economy standards enacted by the Environmental Protection Agency will leave the Highway Trust Fund $72 billion short by the year 2025.

That includes the latest rule issued Aug. 28 that requires auto manufacturers to achieve a 54.5 mpg average for cars and light trucks.

ARTBA’s estimate of the shortfall does not take fuel economy standards for medium- and heavy-duty trucks into account, according to its report.

The EPA and the National Highway Traffic Safety Administration brought the first-ever fuel economy standards for heavy trucks in 2011, calling for a 20 percent improvement during model years 2014-2018. The agency is reportedly working on another round of standards for heavy vehicles manufactured beyond 2018.

Truckers are concerned that the boost in fuel economy will also boost the cost of equipment. The shortfall for the Highway Trust Fund would be a double whammy as lawmakers look to replace the funding that is lost from fuel taxes.

“We shouldn’t be bleeding the Highway Trust Fund dry simply to accomplish some goals for automotive fuel economy or greenhouse gas reduction,” said OOIDA Director of Legislative Affairs Ryan Bowley.

“It certainly speaks to the need for Congress to look long term at how we fund our highway system,” he said.

“It’s always been our view that they’re upping the prices so much that there is a good portion of the population that aren’t going to be able to purchase the vehicles.”

The ARTBA estimate has merit even if it doesn’t take heavy truck standards into account.

Back in May, the Congressional Budget Office estimated that EPA mileage standards would cost the Highway Trust Fund $57 billion by 2040. That report also did not take medium- and heavy-duty truck standards into account.

Bowley says the consequences of the economy rules could lead to lead to lawmakers looking to raise taxes on truckers and other highway users to make up for the shortfall.

“This is just another example of EPA not having a great understanding or interest in the consequences of their rulemaking, their regulations and their mandates,” Bowley said.

“Truckers know all too well that EPA doesn’t have a clear understanding of the cost of their mandates on folks who want to purchase new trucks, or purchase used trucks for that matter. They’re assuming everyone’s going to be able to buy them. But as we know, that’s just not the case.”

Bowley points out that the new EPA standards encourage vehicles to use less fuel, or no fuel in the case of electric vehicles and hybrids.

“Those vehicles, for the time they’re using no fuel, don’t pay anything into the Trust Fund,” he said.

That contributes to the shortfall while allowing those vehicles a free pass on road wear.

“Folks make the case that heavy trucks don’t pay their fair share, but hybrid-electric vehicles don’t pay into the Trust Fund, and that’s a problem that Congress needs to solve,” Bowley said.

See related stories:
Fuel economy standards only help if people can afford the vehicles
Fuel efficiency means less money for roads


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