Don't Open Up the Strategic Petroleum Reserve; Close the SUV Loophole
On Thursday afternoon, President Joe Biden announced that the federal government would release up to a hundred and eighty million barrels of oil from the Strategic Petroleum Reserve over six months. The move, aimed at bringing down gas prices—“Americans are feeling Putin’s gas price hike at the pump,” Biden tweeted—is obviously politically motivated. Looked at in purely partisan terms, it probably makes sense for Democrats facing a tough election year. But, regarded through a wider lens, it’s a policy mistake built on previous policy mistakes. It is those mistakes that the Biden Administration should be trying to fix, but isn’t.
The origins of the problem go all the way back to what might be called the original oil crisis, of 1973. In response to that crisis, Congress passed the Energy Policy and Conservation Act, which established the Strategic Petroleum Reserve. At the same time, it mandated Corporate Average Fuel Economy, or cafe, standards for cars. The goal was to reduce the country’s dependence on foreign oil.
The cafe standards were, from the outset, easy to game. To meet them, a car manufacturer could still sell a lot of inefficient cars, provided that it sold enough more efficient vehicles to meet a certain fleetwide average. (In 1978, the year the standards were introduced, the average vehicle sold was supposed to get at least eighteen miles to the gallon.) A separate, laxer standard was introduced for “light trucks,” essentially pickups that people used for work. No one gave sport-utility vehicles much thought, because they barely existed.
That soon changed. In 1984, Jeep introduced what’s sometimes called the first “mainstream” S.U.V., the Jeep Cherokee XJ. Sales of light trucks, now including Cherokees and their brethren, shot up. By 2004, they made up more than half of new-vehicle sales. Consumers obviously liked S.U.V.s, and automakers made a lot of money off of them. The S.U.V. loophole, as it became known, kept both groups happy. But the more S.U.V.s Americans drove out of the showroom, the more oil the country burned through—and the more carbon dioxide it emitted. (Every gallon of gasoline that’s combusted adds twenty pounds of CO2 to the atmosphere, and this is not counting the carbon produced during the refining process.)
In 2006, the National Highway Traffic Safety Administration—which, with the Environmental Protection Agency, shares responsibility for the cafe standards—changed the way it did its calculations. Instead of having to meet a fleetwide average, car manufacturers would now have to meet different standards, depending on how many vehicles they sold of what size. “It is the most complicated system they could possibly come up with,” Dan Becker, the director of the Center for Biological Diversity’s Safe Climate Transport Campaign, said.
This new “footprint” method had the perverse effect of further incentivizing carmakers to produce gas guzzlers.