Automobile manufacturers have been facing increasing regulatory requirements to meet to fuel efficiency standards under U.S. and state laws since the 1970s. Fuel efficiency improvements for automobiles can be achieved through improvements in technological advances in automobile engine performance and car design, and these advances often require modifications to fuels used to power the engines. As the fuel efficiency standards have become more stringent, manufacturers are exploring a range of alternatives to meet the new standards, including new fuels. One such proposal is to substantially raise octane in US transportation fuels to permit the deployment of higher compression and thereby more fuel-efficient vehicles.
In response to these proposals, EPRINC has initiated a research effort to evaluate both the cost and feasibility of deploying alternative fuels for the American auto fleet. The initial project is focused on evaluating the costs and benefits of raising octane levels for motor fuels and this note outlines the research effort. A detailed assessment of lifting octane levels will be issued later this year.
Corporate Average Fuel Economy (CAFE) Standards were first adopted in 1975 through the passage of EPCA 1975 (The Energy Protection and Conservation Act of 1975). The purpose of the Standards has been to increase fuel efficiency in newly manufactured vehicles, thereby limiting fuel consumption. Because of public opinion, Congress was unwilling to reduce gasoline consumption through taxes. Instead, Congress passed a mandate under EPCA requiring manufacturers and marketers to assemble and sell vehicles with minimum fuel efficiency performance, increasing incrementally with each model year (MY). The enforcement and recalibration of the CAFE standards has been uneven; but by most analyses the program has caused fuel economy to approximately double between the 1970s and the mid-1980s. The program has continued to go through more extensive revisions and the most recent standards set in 2012 are now under review. EPRINC has written on some of the challenges facing the program and links to those papers are at the end of this note.