Fuel economy of new light vehicles, together with average annual oil price (expressed in $2008). Source: EPA for fuel economy statistics, BP for oil prices, with estimate for 2009 based on data through November
Above is the trend in new vehicle fuel economy in the US. This is in contrast to the deployed fuel economy chart in Monday's piece. Obviously, the fuel economy of the entire deployed fleet is a complex function - involving the weighted average of the fuel economy of individual new vehicles declines over time, together with some function expressing how fuel economy of individual vehicles over time.
A few points:
- New vehicle fuel economy has improved a bit as a result of the oil price spike of 2005-2008 (but not enough to show through into the whole fleet numbers as we saw).
- The response is much poorer than during the 1970s. People have not gotten serious about this.
- The 2009 data for fuel economy already show a leveling off. As soon as oil prices fell from the 2008 heights, people gave up the effort to start improving fuel economy.
- The cash-for-clunkers program was not powerful enough to markedly improve the situation in 2009.
- The new car fuel economy trend has not provided any basis for large (4%+) sustained increases in deployed fleet fuel economy.
So, going back to the egregious CNN piece:
The energy intensity of the U.S. economy has actually dropped by about 2% a year every year since the early 1980s. In the next couple of years Deutsche Bank expects it to decline by around 3% as people buy more fuel efficient cars and respond in other ways to the high prices of 2004-2008This can't be used as a justification for why prices will go down! People will only make those efficiency gains if prices stay high or go higher. It doesn't make any sense.