WASHINGTON INSIGHT

Fleet Fuel Economy, Climate Change & Congress

Julia Anastasio, Esq.
Senior Manager of Government Affairs
APWA Washington Office

The rise in oil and gas prices over the past year has renewed focus on fuel consumption in
the transportation sector. Larger concerns over climate change and greenhouse gas
emissions are also fueling the debate and ending years of reluctance to increase the fuel
economy of the cars and trucks on the road today. Public works departments nationwide
are feeling the pinch caused by higher gas prices and increasing environmental mandates.
Rising fuel prices have also captured the attention of Congress who, for the first time in
years, is contemplating changes to federal fuel economy standards to address rising fuel
prices, dependence on foreign oil and to reduce greenhouse gas emissions from the
transportation sector.

Congress is attempting to address the dual issue of rising fuel costs and concern over
greenhouse gas emissions by proposing changes to the Corporate Average Fuel Economy
(CAFE) standards. CAFE standards are flexible economy averages that manufacturers
must meet each model year. Under the current CAFE standards, separate fuel economy
standards are established for passenger cars and light trucks, which include sport utility
vehicles, vans and pickup trucks. Current CAFE standards require automakers to achieve
27.5 mpg for passenger cars and 22.2 mpg for light trucks. Vehicle fuel economy
standards have not changed in at least two decades.

The Senate was the first to begin considering increasing fuel economy standards when it
took up debate on a larger energy package (HR 6), which includes issues such as fuel
economy standards and renewable and alternative energy standards. A bipartisan group of
senators crafted a compromise measure, known as the Stevens Compromise/fuel
economy compromise (S.AMDT. 1792), which would raise the fleetwide average fuel
economy standards for all cars, trucks and SUVs over a ten-year period from 25 mpg to
35 mpg by model year 2020. From 2011 to 2019 the U.S. Department of Transportation
must set fuel economy standards that are the maximum feasible and ratchet these
standards up to make steady progress toward meeting the 2020 goal of 35 mpg.
Supporters estimate that the new fuel economy standards for cars and light-duty trucks
would save between 2 and 2.5 million barrels per day. Carbon dioxide emissions would
be reduced by 18%, or the equivalent of taking 60 million cars off the road in one year.
The Senate intends to complete work on the larger energy package, including the revised
CAFE standards, before they adjourn for recess in August.

The House will take up CAFE and fuel economy standards when it begins consideration
of a larger energy package shortly after July 4. Check the APWA Advocacy web page
regularly for updates on this issue and others. www.apwa.net/advocacy.

In communities everywhere streets are swept, neighborhoods patrolled and important
business conducted with vehicles owned, operated and maintained by public works
departments. Maintaining a vehicle fleet is a key component of local governments'
operations, yet operating a fleet of vehicles comes at a price. Beyond the monetary cost,
fleet vehicles represent a significant source of air pollution. Also, every gallon of
gasoline or diesel fuel burned releases about 22 pounds of carbon dioxide (CO2), the
major pollutant causing global warming. Fleets can play an important role in reducing
global warming and air pollution emissions.

There are a myriad of options and approaches currently available to fleet managers who
are interested in greening their fleet, including alternative fuels, conversion to a hybrid
fleet, or adding a mix of hybrids, CNG, and diesel technologies to reduce fleetwide fuel
consumption within a department, or reduce expenses by replacing fleet vehicles with
leased rideshare vehicles. A comprehensive green fleet strategy begins with an inventory
of fleet vehicles, including types of vehicles, how many there are of each type and the
type and quantity of fuel they use. Second, realistic goals are set for reducing fuel, criteria
air pollutants and carbon dioxide emissions for the fleet. Third, implement green
measures, which may include "rightsizing" fleet vehicles by downsizing and eliminating
vehicles, optimizing vehicle travel, operation and maintenance; substituting other travel
modes or reducing the need to travel; and purchasing fuel efficient, alternatively fueled
and electric vehicles. Effective fleet management can play an important role in reducing
costs and in improving the environment.

For instance, the City of Wilmington, Delaware recently launched a pilot program where
employees from the mayor's office, planning, legal and public works departments will
turn in their City vehicles and instead share two hybrid vehicles provided by
PhillyCarShare-Delaware (a Philadelphia-based group that leases a fleet of vehicles by
the hour). The City will pay $1,400 per month per car share vehicle, which includes
coverage for insurance, gas, maintenance and keeping the cars clean. The City intends to
remove 10 vehicles from its fleet due to the ridesharing program. See "Wilmington pilot
program turns vehicle fleet green," Luladey B. Tadesse, Delaware Online, June 19, 2007.
New York City recently converted many of its garbage trucks to biofuel. Starting July 1,
the City will fuel its fleet of 4,500 garbage trucks with a blend of 5% biodiesel and 95%
regular diesel (referred to as B5), resulting in a 3% reduction in particulate pollution and
decreasing the fleet's greenhouse gas emissions by 5%. Several other cities across the
country, including Seattle, Portland, Berkeley and Grand Rapids, have made the switch to
biodiesel in their garbage fleets over the past few years. See "Garbage trucks spruce up
with biodiesel," Rebekah Kebede, Reuters, June 18, 2007. According to SustainLane
Government
2006 U.S. City Rankings, the top ten alternative fueled city fleets are: Las
Vegas, Nev. (63%), Honolulu, Hawaii (51%), Kansas City, Mo. (45%), Albuquerque,
N.M. (42%), Dallas, Tex. (39%), Denver, Colo. (31%), Phoenix, Ariz. (28%), Los
Angeles, Calif. (25%), Seattle, Wash. (25%) and Portand, Ore. (25%). The rankings are
based on the percentage of city vehicle fleets using alternative fuels including biodiesel,
hydrogen, ethanol, compressed and natural gas, as well as electric vehicles and gas-
hybrid vehicles. See www.sustainlane.us/articles/top_ten_alternative-fueled-
city_fleets.jsp.

Even if Congress fails to enact more stringent CAFE standards, there are many existing
federal voluntary programs that fleet managers can use when greening their fleet. The
Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE) each
have programs to assist local governments in reducing fuel consumption and in greening
their fleets. The Department of Energy sponsors the Clean Cities Program, which is
designed to advance the economic, environmental, and energy security of the United
States by supporting local decisions to adopt practices that contribute to reduced fuel
consumption. Clean Cities carries out its mission through a network of volunteer,
community-based coalitions, which develop public/private partnerships to promote the
use of alternative fuels and vehicles, expand the use of fuel blends, encourage the use of
fuel economy practices, increase the acquisition of hybrid vehicles by fleets and advance
the use of idle reduction technologies in heavy-duty vehicles. Visit
www.eere.energy.gov/cleancities for more information. The EPA has numerous programs
and initiatives, including the Clean Diesel Campaign and the Clean Construction USA
partnership programs designed to promote the reduction of diesel emissions from
construction equipment and vehicles. See www.epa.gov/otaq and search for Clean Diesel
Campaign. EPA's Clean Fuel Fleet program provides detailed information on certified
alternative fuel vehicles, lists of certified heavy-duty engines and EPA regulations and
guidance. See www.epa.gov/otaq and search for Fuels and Fuel Additives for more
details.

Fleets play in an important role in containing operations costs and in reducing
contributions of harmful greenhouse gas emissions. This role may increase as Congress
addresses domestic fuel consumption and strives to craft a comprehensive energy policy.
Continue to monitor the APWA Advocacy web page (www.apwa.net/advocacy) for
developments and updates on changes to the CAFE standards and more.

Julia Anastasio monitors legislative and regulatory affairs touching on
environmental issues for APWA members. She can be reached at (202) 218-6750 or
janastasio@apwa.net.