By Camille von Kaenel

When gas prices rose to $4 10 years ago, Americans flocked to smaller and more fuel-efficient cars.

But would it happen again? Analysts don’t think so, suggesting that future spikes in pump prices might not turn Americans away from bigger cars.

Here’s why: Even today’s biggest vehicles offer fuel economy rivaling that of smaller cars a dozen years ago. That’s because the government mandated strict fuel standards under President Obama, helping cars and trucks travel about 6 miles farther on a gallon of gas, on average. The Trump administration is weakening those rules.

So if gas prices rise sharply, it would cost motorists less than a decade ago, according to analysts. So they have less incentive to trade their trucks for a cleaner car.

“This is more of a structural thing in the U.S. auto market,” said Sam Ori, the executive director at the Energy Policy Institute at the University of Chicago. “People care about efficiency, but their behavior doesn’t show that, not on a national basis.”

Sales on the showroom floor bear this out. Even though fuel prices are inching up for the first time in many years, the move toward trucks is still strong, according to the latest sales data. In that way, President Trump’s move to roll back Obama-era fuel economy standards, which sought to make cars travel 54.5 mpg by 2025, might not change the type of vehicles that people buy. (In the real world, Obama’s standards would result in about 36 mpg.)

“It’s hard to paint a scenario where the oil market dynamics have a big impact on how people think about these rules in the real world in the near term,” Ori said.

Continue reading at E&E News…

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Areas of Focus: Energy Markets
Definition
Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
Transportation
Definition
Transportation
Mobility is central to economic activity. Yet, a lack of fuel diversity and continued demand growth have made the transportation industry a major contributor to global pollution and carbon emissions....
Fuel Economy Standards
Definition
Fuel Economy Standards
Fuel economy standards are the United States’ cornerstone transportation policy aimed at reducing both oil consumption and greenhouse gas emissions. EPIC research is exploring whether these standards are structured optimally...