Right-Wing Media Claim Fuel Standards Will Boost Truck Costs, “Kill Off” Trucking Business

Hoft: “Now Obama Wants To Kill Off The Long-Haul Rig & Trucking Businesses.” In an August 12 Gateway Pundit post, Jim Hoft wrote:

As if he hasn't done enough already to destroy the greatest economy on earth, Barack Obama on Tuesday passed legislation to kill the American long-haul rig and work truck businesses.

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Obama's latest regulations on the trucking industry will force thousands of long-haul truckers out of business and will significantly increase expenses on all trucking companies. [Gateway Pundit, 8/12/11]

Hot Air: Standards Mean It Will “Cost More For These Companies To Operate And Haul Their Cargo.” From an August 12 post on Hot Air:

We've had the opportunity to previously discuss the Obama administration's proposed changes to CAFE standards for the nation's fleet of passenger vehicles and the downstream effects this will have on auto prices and jobs. Never satisfied with half measures in “helping” us in this struggling economy, the White House has apparently decided to double down and apply similar new standards to long haul, big rig trucks now.

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Transportation companies have their eye on the bottom line just like everyone else, and fuel is one of their biggest expenses. Does anyone honestly believe that they aren't already demanding the most gas efficient trucks the manufacturers can provide at a sustainable cost? It's just how the market works.

So if this plan has the same effect we anticipate ramped up CAFE standards to have on the passenger vehicle fleet, it's going to cost more for these companies to operate and haul their cargo. And who gets the bill for the increased shipping costs? I'll give you one guess. [Hot Air, 8/12/11]

But New Standards Will Reportedly Save $50 Billion In Fuel Costs Over Five Years ...

Bloomberg: According To Administration, “U.S. Truck Makers ... [Will Save] $50 Billion In Fuel Costs Over Five Years” Under New Standards. From an August 9 Bloomberg article:

U.S. truck makers will improve tractor-trailer fuel economy by about 20 percent by 2018, saving $50 billion in fuel costs over five years and decreasing carbon-dioxide emissions, President Barack Obama said.

The administration's plan -- the first attempt to regulate the efficiency of heavy-duty trucks, including city buses and garbage trucks -- will save 530 million barrels of oil, according to a statement from the White House today.

The standards for heavy-duty trucks follow Obama's July 29 announcement of fuel-economy rules for cars and light trucks that are to take fleetwide averages to 54.5 miles per gallon by 2025. For heavy-duty trucks, regulations focus on how much carbon individual truck parts emit, instead of the mileage standards used for cars. The effort to regulate big rigs and other work trucks started while the White House was negotiating fuel-economy rules for passenger vehicles, Obama said. [Bloomberg, 8/9/11]

Bloomberg: “The Cost Of A Big Rig Will Increase Approximately $6,220,” But “Truck Operators Will Save $73,000 In Fuel Costs Over The Lifetime Of The Trucks.” The August 9 Bloomberg article also stated:

The cost of a big rig will increase approximately $6,220 because of the new fuel-saving technology, administration officials said during a briefing yesterday. Truck operators will save $73,000 in fuel costs over the lifetime of the trucks, according to summaries of the regulation. [Bloomberg, 8/9/11]

WSJ: “There Will Be Some Upfront Costs In The Form Of Higher Truck Prices ... But, Over Time, Administration Officials Said The Rules Will Save $50 Billion In Fuel Costs.” From an August 9 article in The Wall Street Journal:

The Obama administration will require truck manufacturers to meet new fuel-efficiency standards lowering carbon-dioxide emissions for large trucks and buses by as much as 20% by 2018.

The rules, which the White House unveiled Tuesday, are the first ever for the commercial-truck industry and will apply to large vehicles such as 18-wheelers, garbage trucks and delivery trucks. The administration will require manufacturers to begin offering more-fuel-efficient vehicles as early as 2014, with the biggest reductions coming by 2018.

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There will be some upfront costs in the form of higher truck prices, including an estimated $1,050 for work trucks, $380 for vocational trucks and $6,220 for supercab tractors. But, over time, administration officials said the rules will save $50 billion in fuel costs and a projected 530 million barrels of oil. [The Wall Street Journal, 8/9/11]

Tribune: Administration, Manufacturers' Group “Estimated That The Higher Costs Would Be Recouped Very Quickly, Often Within A Year Or Two.” From an August 11 Tribune Co. article:

Moreover, the new standards encourage car and truck makers to use off-the-shelf technology, some of which they have already deployed, rather than invest in scientific breakthroughs.

“We'd be able to meet the standards by reducing weight, using low rolling-resistance tires to cut down on drag, making vehicles more aerodynamic and have less idling: those are available in the U.S. now,” said Jed Mandel, president of the Engine Manufacturers Association, the truck and engine makers' trade group. The federal government has “done a great job in allowing flexibility for truck makers to build vehicles.”

The new standards would increase the cost of heavy duty trucks, which cost tens of thousands of dollars, by several thousand dollars each, depending on the vehicle. But the administration and the manufacturers' group estimated that the higher costs would be recouped very quickly, often within a year or two, because of savings at the pump, one of the biggest expenses for any cargo or trucking business.

The administration estimated that businesses using big trucks could save about $50 billion in fuel costs over the program's duration. [Tribune Co., 8/11/11, via the Newport News (VA) Daily Press]

... And New Standards Have Trucking Industry Support

NPR: “Truck Industry Welcomes New Fuel Regulations.” From an August 9 NPR report:

The Obama administration announced Tuesday the first ever fuel efficiency standards for larger trucks and buses. New vehicles sold in 2018 will go up to 20 percent farther on a gallon of fuel. So far, the truck manufacturing industry is welcoming the rules.

Outside the White House today, the heavyweights of the truck manufacturing industry took the microphone one after another.

“We're happy to be part of this. We really appreciate the process,” says Denny Slagle, CEO of Mack Trucks.

“We welcome the challenge and think it's a win all the way around; for the customers, for the industry and for all of us that participate in it,” says Rich Freeland, president of the engines division at Cummins.

Freeland says his business is strong. Although the fuel economy targets are tough, he says it's easy for his industry to like this rule.

“This one lines up really well with what customers want. And they want fuel economy,” he says. [NPR, 8/9/11]

Bloomberg: CEO Of American Trucking Associations: “It Was A Win-Win For Everyone.” From the August 9 Bloomberg article:

The effort to regulate big rigs and other work trucks started while the White House was negotiating fuel-economy rules for passenger vehicles, Obama said.

“We started getting letters asking that we do the same for medium and heavy-duty trucks,” Obama said in the statement. “They were from the people who build, buy and drive these trucks. And today, I'm proud to have the support of these companies.”

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Trucking companies, who will bear the up-front costs of more expensive technology, will pay for the investments through fuel savings in 18 months to 24 months, said Bill Graves, president and chief executive officer of the American Trucking Associations in Arlington, Virginia.

“It's an exciting time for our industry,” Graves said to reporters outside the White House. “It was a win-win for everyone.” [Bloomberg, 8/9/11]