Saturday, October 06, 2007

Honda mileage target

The Japanese automaker said it opposes moves in Congress to set efficiency targets for vehicles.

In its annual North American Environmental Report, Honda emphasized that it favored tougher federal fuel-economy regulations and touted its status as the most efficient full-line automaker. But its fuel-economy pledge falls far short of the 4% annual increases and hard targets that environmental groups maintain the auto industry should be forced to meet.

To me it makes a lot of sense that Honda doesn't want to sign up for the 4% per year. If you are a person that is already thin it is harder for you to loose 10 pounds than for someone who is overweight. Their cars are very fuel efficient already.

Honda has not taken sides in this year's congressional debate over fuel economy and tends to cut its own political trail in Washington. It has joined with Detroit automakers and its Japanese competitors in opposing California's efforts to set state controls on greenhouse gases from cars and trucks. Thanks to its long-held decision against building engines with more than six cylinders, Honda had the highest fuel-economy average among the six largest manufacturers in 2006 at 29.1 miles per gallon.

Isn't it amazing how Honda doesn't need a V8? They do just fine in the North American market without it. That's because they make and excellent 4 cylinder engine that you is really nice to drive.

Tuesday, March 13, 2007

Bush fuel economy plan has rough debut in Congress

Automotive News had an interesting article on Bush's proposal to increase our nations fuel economy. Here's the article along with my comments.

The Bush administration estimates that its plan to improve fuel economy would raise the price of the average General Motors car $1,800 by 2017. In contrast, the price of the average Honda would increase less than $600. President Bush wants to raise fuel economy standards by as much as 4 percent a year, to meet his goal of cutting U.S. gasoline consumption by 20 percent over 10 years. You know unfortunately I think it has to be done. We have to challenge the our automotive industry improve the overall fuel ecomony. I think that this is a real opportunity for our "D3" automakers to work together and find solutions that will help them get to the goal faster and cheaper. The bottom line is the Japanese have been working on perfecting their engines and improving fuel economy for years.

Data on the plan's possible disparate impact on automakers emerged last week during a House hearing. Administration officials appeared before a subcommittee of the House Energy and Commerce Committee to defend the plan. They conceded it is a work in progress, especially the 4 percent-a-year provision."It's a target," said Nicole Nason, administrator of the National Highway Traffic Safety Administration. "I don't know that we'll get there." NHTSA has set higher fuel standards for light trucks through the 2011 model year, although nowhere near 4 percent a year. The administration wants Congress to authorize NHTSA to set separate fuel standards for different sizes of cars. The fleet car standard has been at 27.5 mpg since 1990. Amazing, the same since 1990. We had 16 years to work on improving the fleet fuel economy and we didn't improve it. So with flirting with $3 gas again, we need to get on with it.

Lawmakers of both parties challenged details of the plan. The debate over vehicle fuel economy is further complicated by the growing interest in Congress to enact a broader law that would limit greenhouse-gas emissions from all sources. Rep. John Dingell, D-Mich., chairman of the full committee, historically has allied himself with automakers opposed to higher standards. But he said last week, "The old debate is no longer sufficient."

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Locking In Gas Prices When They're Low

I saw an interesting article at NPR on locking in low gas prices. Here is what they said along with my comments.

There you are, steamed at paying $3 for a gallon of gasoline. So how does it feel to learn that some people are paying $2 dollars, or even a buck a gallon? That's because they bought it from a small chain of gas stations in central Minnesota that allows customers to pre-pay for gasoline, and stockpile it for when prices jump. Remember the summer of 2006? I paid as high as $3.40 per gallon. I would love to be able to lock in low gas prices now and use it up in the summer. Like most people our summer hobbies end up consuming a lot of gas and the gas companies tend to like to raise the prices during the summer.

First Fuel Banks has six gas stations in the St. Cloud, Minn., area, where customers can buy as much gasoline as they like, whenever the price seems right. First Fuel then stores the gasoline in its oversized tanks, or buys futures contracts for really long-term purchases. Pre-paying for gasoline requires that customers tie up their money for a while. Think about it, if you buy 400 gallons of gas today at roughly $2.50 per gallon that is $1000 dollars. If gas goes up to $3.50 this summer you end up saving $400. That is a 40% return on you hedge. Take a look at the 3 year chart below compliments of Gas Buddy. Gas prices over the last 2 out of 3 years peaked in August. Even if gas didn't peak they sure didn't go down in the summer.

But otherwise, there's no charge for the program, aside from a one-dollar membership fee. And it can yield huge savings. Thousands of First Fuel customers are able to fill their tanks for less than $2 a gallon. CEO Jim Feneis says that a few hundred of his customers actually locked their prices in at less than $1 a gallon. The advance-purchase option was once only available in Minnesota. But soon it will get a tryout in 11 northeastern states. Gulf Oil CEO Joe Petrowski plans to introduce the advance-purchase option later this year at about 1800 Gulf stations from Delaware to Maine. Bring it on. I hope more gas companies will do this. When you think about it how often do you go to the same gas station. Chances are you buy from a lot of different locations. If you pre-bought your gas, guess where you would buy it from? The same station. In principle gas station owners told the general public that they did not make anymore money when gas was $3.00 vs. $2.00 per gallon. So if that is true the gas companies can sell it to you when it is low price and then you can consume it when it is higher. Sounds like a great idea to me.
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