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US move to reduce oil price by cutting consumption

August 28, 2012

WASHINGTON, Aug 28: The Obama administration announced a historic initiative on Tuesday that can bring down oil prices across the globe by bringing down US petrol consumption by three million barrels a day.

The new clean car standards will raise automobile fuel efficiency to 54.5 miles a gallon by 2025, roughly twice the mileage cars get today.

“These fuel standards represent the single most important step we’ve ever taken to reduce our dependence on foreign oil,” said President Barack Obama while announcing the measure. “It’ll strengthen our nation’s energy security, it’s good for middle class families and it will help create an economy built to last.”

President Obama announced the plan in July 2011, joined by Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo, as well as the United Auto Workers.

The State of California, the largest car market in the US, and other key stakeholders also supported the measure and were integral in developing the national programme announced on Tuesday.

The United States is the world’s largest oil importer, importing 11.3 million barrels a day, followed by Japan, 5.03 million barrels and China, 4.39 million barrels.

The new measure will force car companies to make cars that are more fuel efficient which will bring down oil consumption not only in the US but also in other countries, experts appearing on various American television channels predicted.

Technological innovation in areas such as shale gas has already reduced US oil imports by 40 per cent over the past several years.

“In total, the administration’s national programme to improve fuel economy and reduce greenhouse gas emissions will save consumers more than $1.7 trillion at the gas pump and reduce US oil consumption by 12 billion barrels a year,” the White House said.

The US media described the move as “the biggest step the US has taken to reduce carbon pollution and combat climate change”.

It will reduce carbon pollution by 2 billion metric tons and create 570,000 jobs by 2030, the Obama administration said.

The Obama administration expects car makers to use a range of efficient and advanced technologies to transform the vehicle fleet. The standards issued on Tuesday provide for a mid-term evaluation of the cars already in the market by allowing monitoring agencies to review their effectiveness and make any needed adjustments.

The White House pointed out that major auto manufacturers were already developing advanced technologies that could significantly reduce fuel use and greenhouse gas emissions beyond the existing model year 2012-2016 standards.