Frequently asked questions

Q: What is "CAFE"?

Corporate Average Fuel Economy standards, set by a 1975 law, required auto companies to meet a fleet-wide fuel economy average of 27.5 miles per gallon for cars by 1985. CAFE standards worked--they increased new car and truck fuel economy by 70 percent between 1975 and 1988. But these initial fuel economy gains have since eroded. The amount of miles driven has doubled and cars are increasingly being replaced with significantly less efficient SUVs and light trucks.

Despite these set backs, CAFE standards saved American consumers $92 billion, reduced oil use by 60 billion gallons of gasoline, and kept 720 million tons of global warming pollution out of our atmosphere.

Q: Why are new CAFE standards needed?

The United States consumes 14 million barrels of oil per day for vehicle transportation--about two-thirds of the country's total oil use. Over 60 percent of this oil comes from overseas--consumers spend more than $200,000 per minute to buy foreign oil--and much of this oil comes from unfriendly regimes.

Burning this oil in cars and trucks increases air pollution and adds to global warming. An estimated 24 pounds of carbon dioxide pollution are released for every gallon of gasoline burned.

The Senate recently passed a bill that would increase fuel economy standards to 35 mpg by 2020. If properly implemented, it would reduce oil use by 1.2 million barrels a day in 2020, which is a little less than we imported from Venezuela last year. The new standard would also reduce global warming pollution by 200 million metric tons annually, which would be like removing 34 million cars from the road. And consumers would save $25 billion due to lower gasoline use. The House of Representatives has to follow the Senate and must pass this proposal, as well.

Q: Can't people who want fuel efficient cars buy them? Why do we need a law?

The number of fuel efficient models is currently limited. Most automakers only offer no-frills small cars to drivers who want fuel-efficient vehicles, while pouring their advertising money into the bigger cars that make them more money. Yet fuel efficient technologies can work for all types of vehicles, from sub-compacts to SUVs. Saving fuel does not mean sacrificing performance.

Some automakers promised to manufacture more efficient vehicles across the board, but those commitments yielded only about a 5 percent increase in the fuel economy of each company's fleet by 2005. This paltry improvement barely keeps up with the growth in gasoline use, consumer costs, and environmental pollution. Only through federal fuel economy standards can we lock in fuel economy gains throughout the automotive industry.

We need more energy efficient fuel economy standards because car companies do not voluntarily employ cost effective technologies that add safety and protect the environment until they are forced to do so. The government had to step in to safeguard drivers by establishing safety, fuel economy, and emissions standards--requiring air bags in all new cars, for instance, because automakers resisted adding them even though they saved lives. And the government should step up again and set fuel economy standards.

Q: Won't new CAFE standards raise car prices and cost jobs?

An increase in fuel economy standards would raise the cost of a new car by $1,000-$2,000, but will save consumers $2,500-$5,000 in lower gasoline bills. The Senate bill alone would save consumers $25 billion in 2020.

And contrary to myth, stricter fuel economy standards would create jobs. The Union of Concerned Scientists just released a report that found that the 35 mpg standard would create nearly 24,000 auto industry jobs and over 200,000 new jobs economy-wide by 2020.

Q: Won't new CAFE standards force people to drive smaller, less safe cars?

Auto safety experts found no direct relationship between better mileage standards and worse fleet safety. There are a number of technologies that can increase engine efficiency without affecting safety. These include variable valve engines, high-strength steel and aluminum, and unibody construction.

Q: What is ethanol?

Ethanol is another name for ethyl alcohol. It is produced by fermentation of grains and sugarcane into alcohol. In the United States, fuel ethanol is mostly made from the starch in corn kernels. In Brazil it is made from sugar cane.

Ethanol is used as an octane-enhancer to reduce the pollution of gasoline. Ethanol is used in regular cars at up to a 10 percent blend with gasoline, known as E10, with no loss in performance. About one-third of all gasoline sold in the United States contains some ethanol.

The U.S. ethanol industry produced more than 4.9 billion gallons in 2006, up 24 percent from the previous year. The United States consumes about 140 billion gallons of gasoline annually. Adjusting for its lower energy content, ethanol provided slightly more than 2 percent of the total U.S. demand for gasoline.

Q: What is E-85?

E-85 is a blend of 85 percent ethanol and 15 percent gasoline. It can power a "flexible fuel vehicle" that can use either E-85 or ordinary gasoline.

Q: What are the benefits of using E-85 instead of gasoline?

E-85 burns cleaner than gasoline, produces less global warming pollution, and reduces the consumption of oil. Ethanol production benefits farmers and creates jobs in rural areas.

Compared to regular gasoline, E-85 yields reductions in:

• Carbon dioxide, a major global warming pollution, by 17 percent.
• Ozone (smog) forming volatile organic compounds by 15 percent.
• Ozone-forming nitrogen oxide emissions by 10 percent.
• Particulate (soot) emissions of 20 percent.

E-85 could replace a portion of the oil used to fuel American cars and light trucks. Together with improvements in fuel economy, E-85 and other ethanol blends could significantly lessen U.S. gasoline and oil consumption. Lower demand for oil should reduce its price and limit gasoline price volatility.

Production of E-85 and other ethanol blends can also help farmers and rural economies. It creates a new market for corn, raising its price. Ethanol refineries are frequently built in rural communities in close proximity to the farmers who provide the feedstock, which would lower production costs and create non-farm jobs in these rural areas. Farmers would benefit further if they are owners or shareholders in local refineries.

New ethanol plants built in 2006 supported over 153,000 American jobs and added billions of dollars to the economy.

Q: What is a flexible fuel (flex fuel) vehicle?

Flexible fuel vehicles can run on E-85 or regular gasoline. Flex fuel vehicles are otherwise indistinguishable from gasoline-only cars. It costs less than $200 more to make a flex fuel car, but they are usually sold for the same price as their standard counterpart. Henry Ford's Model T was an early flex fuel vehicle.

Brazilians buy 1 million flex fuel cars annually, which accounts for 80 percent of sales. The United States has approximately 4.4 million flex fuel cars on the road and U.S. car companies estimate that they will have sold 8 million flex fuel cars by 2008. If they were all run on E-85, it would reduce U.S. gasoline consumption by 4.5 billion gallons a year.

Q: So what's the problem with flex fuel vehicles?

Government policies encourage investments in ethanol production and encourage the manufacture of flex fuel cars. Yet fewer than one out of 100 flex fuel cars actually use E-85. Even though ethanol is generally cheaper than gas at the pump, E-85 is sold at only 1,110 service stations out of 170,000 nationwide. E-85 is unavailable in nine states. California has only two stations that sell E-85 even though it has a quarter million flex fuel cars. New Jersey has no stations with E-85 even though there are 116,000 flex fuel cars there.

Q: Why isn't E-85 more available?

There are three related reasons for the lack of availability of E-85. First, there is a lack of consumer awareness about the benefits of the fuel, so there is less demand for it. Second, it requires an investment by service station owners to install E-85 pumps, and without demand for the fuel there is little incentive to offer it. Of course, drivers don't ask for it because it is generally unavailable. And third, oil companies have made it difficult for their service station franchisees to sell E-85 because it competes with their gasoline. The Wall St. Journal found that "oil-company policies make it harder for many service stations to stock ... E85." Some oil companies prohibit E-85 pumps under the canopy with other pumps or ban stations from listing the price for E-85 with the listings for other types of gasoline.

To address these problems, Congress must create tax incentives for service stations to add E-85 pumps. It should also require that 10 percent of all pumps sell E-85 in counties where at least 10 percent of all autos and light trucks are flex fuel cars.

Q: Some say that ethanol uses more energy than it saves. Is that true?

Some argue that the amount of energy put into producing ethanol exceeds the amount of energy produced by it. This is not the case. For every unit of energy delivered at the pump, corn ethanol requires 0.76 units of fossil fuel energy and gasoline requires 1.22 units. The use of ethanol thus results in the consumption of 40 percent less fossil fuel energy than the gasoline it replaces. This is due to free energy from the sun, improved crop yields, and efficient processing.

Q: If we grow crops for fuel, will it raise the price of food?

An increase in crop prices benefits farmers and would have a minimal impact on food prices. Compared to other costs, such as processing and transportation, crop prices represent a small portion of food prices. The vast majority of the U.S. corn crop is used for livestock feed, not human consumption. With new, alternative feed products, the increased demand for corn will only marginally affect the supermarket prices of meat and poultry. Current corn supplies have the potential to produce 8 billion to 10 billion gallons of ethanol without any negative impact on food supply.

Q: Won't growing more corn for fuel increase pesticide use, farm runoff, and water pollution?

Ethanol production should occur in a sustainable fashion. Ethanol producers must conserve land and water resources, safeguard wildlife habitat and sensitive ecosystems, maximize lifecycle greenhouse gas reduction methods, and grow energy crops in a sustainable manner. There must be transparent certification and labeling criteria to encourage sustainable ethanol production.

Ethanol is a transitional biofuel that can displace some oil use now while we develop new, cleaner biofuels such as cellulosic ethanol.

Q: What is "cellulosic ethanol"?

Most ethanol produced in the United States comes from corn. But advances in biotechnology enable ethanol production from almost any type of plant material. The cellulose in plant fiber, including the leaves, stems, and stalks, can be broken down into sugars by enzymes. The sugars can then be fermented to make ethanol.

Agricultural waste materials such as rice straw and forestry residue such as waste paper and sawdust are abundant and much cheaper than corn and sugarcane, but they require additional processing. The enzymes needed to break down cellulose tend to be genetically modified and unique to the type of feedstock, and therefore costly. However, in the last five years the cost of these enzymes has dropped 30 fold, and the Department of Energy estimates that by 2010 cellulosic ethanol could make its way into American gas stations at a production cost of $1.07 per gallon.

Using agricultural waste alone without putting any additional land under cultivation, the United States could produce 50 billion gallons of ethanol a year. That's about 25 percent of current gasoline use. Cellulosic biofuels produce 60 percent more net energy than they take to produce. And for every gallon of oil used to produce cellulosic ethanol, we get 6-7 gallons of fuel in return, so ethanol can help us reduce oil consumption too. EPA estimates that powering cars with cellulosic ethanol has 90% fewer global warming pollution emissions compared to ordinary gasoline.

Sources: American Coalition for Ethanol; Energy Future Coalition; National Ethanol Vehicle Coalition; Union of Concerned Scientists; U.S. Energy Information Administration; Fueling A New Farm Economy, Jake Caldwell, Center for American Progress, January 2007