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Testimony on proposed vehicle CAFE/GHG standards for 2017–25 (Detroit hearing, January 17, 2012)

Testimony on proposed vehicle CAFE/GHG standards for 2017–25 (Detroit hearing, January 17, 2012)

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Testimony by ICCT senior fellow John German on the Notice of Proposed Rulemaking on vehicle CAFE and greenhouse gas standards for 2017–25, delivered at a hearing in Detroit 17 January 2012.
Testimony by ICCT senior fellow John German on the Notice of Proposed Rulemaking on vehicle CAFE and greenhouse gas standards for 2017–25, delivered at a hearing in Detroit 17 January 2012.

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 ICCT Statement at the January 17, 2012, Hearing onEPA/NHTSA NPRM on 2017–25 Vehicle CAFE/GHG Standards
 IntroductionMy name is John German and I am a Senior Fellow and Program Director at the InternationalCouncil on Clean Transportation. I am happy to present comments on the proposed vehiclestandards on behalf of ICCT. ICCT has broad expertise in all transportation areas and our  primary mission is to help regulatory agencies worldwide reduce air quality pollutants andgreenhouse gas emissions.OverviewWhile the US has consistently been the world’s leader in reducing CO, HC, NOx and PM fromall categories of vehicles, U.S. policies on transportation fuel efficiency and greenhouseemissions have been far less effective. Our fuel taxes are amongst the lowest in the world andwe greatly lagged Europe and Japan in setting effective efficiency standards. The 2012-16 ruletook a giant step towards catching up and the proposed 2017-25 rule will extend the progress andset longer-term requirements. The consistent, long-term signals will help manufacturers plan for on-going technology development. We applaud EPA and NHTSA, along with California, theAdministration, and the vehicle manufacturers, for taking another large step along the road to asustainable transportation system.My comments today will focus on the conservative nature of the technology benefit and costanalyses in the rule. I will also touch upon the safety benefits of the rule and suggestedimprovements in program design and off-cycle credits. Alan Lloyd’s testimony next week on behalf of ICCT will focus on the tremendous importance of this program in addressing climatechange, the partnership between CARB, EPA, NHSTA, OEMs, and UAW, and suggestions for improvement on some of the credits. ICCT will provide much more detailed written comments tothe docket.TechnologyThe opportunities to reduce fuel consumption and climate change emissions in the near term arefar larger than most people realize. The internal combustion engine is widely perceived as beinga century-old technology that is at the end of its development, but the reality is exactly theopposite. Rapid improvements in computer-based tools are opening up technology gains thatwere never possible before. Computer simulations and computer-aided-design are enablingvastly improved designs and technologies. On-board computers controls provide unprecedentedintegration of engine, transmission, and hybrid operation. Instead of slowing down, the pace of technology development just keeps accelerating.The sophistication of assessing technology efficiency improvements has been increasing as well.The 2001 National Research Council report applied technologies stepwise to estimate fueleconomy improvement possible through regulations. Some manufacturers criticized this method,
Statement on 2017–25 NPRM, Vehicle CAFE/GHG StandardsJanuary 17, 2012International Council on Clean Transportation 2
claiming it could overestimate fuel economy benefits because it does not account for synergies between technologies. This is especially important as more technologies are added to thevehicle. The next step in sophistication is the use of “lumped-parameter” models that canaccount for first-order interactions between technologies. These models can assess the effects of technology in a broad array of vehicle types and for a class of vehicles. However, this method isgenerally limited to “proven” technologies. This was fine as long as standards were set only afew years in advance, but it is not adequate for setting standards with longer leadtimes.Full-system simulation modeling is needed to capture the physics of the vehicle and powertrainsystem and assess interactions of the various components. It can also assess new technologies or combinations of technologies when experimental data are sparse. To support development of 2025 standards, EPA contracted with Ricardo to conduct such simulations. Ricardo is a highlyrespected engineering organization that does the vast majority of its work for OEMs andsuppliers.ICCT was involved with this simulation modeling from the beginning, including providing theinitial contract for Ricardo to start work, hiring independent experts to review Ricardo’s hybridcontrol simulations, and participating along with CARB on an advisory committee. After intensive involvement in the simulation process for the last two years, it is clear to us that thetechnologies being assessed by Ricardo are on the conservative side. In fact, this is unavoidabledue to the restriction to currently available data and engine maps. Engine technology isimproving much faster than we can keep up with and engines better than those modeled byRicardo are already in development. For example, the diesel maps used by Ricardo for the USsimulations are already out of date and ICCT has contracted with Ricardo to rerun the dieselsimulations for Europe using maps representative of the latest diesel technology. Another example is the engine map for the gasoline engine with boosted-EGR. The map used by Ricardoin the simulations is shown in Appendix A, below. Appendix B shows a boosted-EGR enginemap provided by the HEDGE consortium in February 2010. The brake-specific fuelconsumption (BSFC) for the HEDGE engine is almost 5% lower than the map used by Ricardoin the simulations. Further, the HEDGE map in Appendix B is for a single stage turbocharger.The HEDGE consortium is already working on a two-stage turbocharger system that will enablelarger amounts of EGR, higher compression ratio, and lower fuel consumption.This rapid technology improvement can also be seen by looking at historical data. For example,the 2001 National Research Council report found that turbocharging and downsizing wouldimprove fuel economy by 5 to 7 percent. The most recent estimates in the draft RIA found thatturbocharging and downsizing alone will provide a 12 to 15 percent improvement with 33 percent downsizing and16 to 20 percent for higher-pressure turbos with 50 percent downsizing.This is a 2 to 3 times increase in the efficiency benefit of turbocharging and it is not due to theolder estimates being wrong, but rather to rapid improvements in combustion and turbochargingtechnology over the last 10 years. The 2025 rules are 13 years away. It would be completelyirrational to assume that there will be no further technology improvements beyond what isknown today. The efficiency estimates in the draft rule are actually quite conservative and thereshould not be any consideration of rolling them back.
Statement on 2017–25 NPRM, Vehicle CAFE/GHG StandardsJanuary 17, 2012International Council on Clean Transportation 3
Computer simulations will especially impact lightweight material design. In the past,interactions between the thousands of parts on the vehicles and their impacts on safety, ride,noise, and vibration were impossible to predict. Optimization of materials was a long, slow process of gradually changing a few parts at a time to avoid unanticipated problems. Secondaryweight reductions were similarly difficult to achieve. The recent development of sophisticatedand accurate vehicle simulations is opening up a new world. The initial use of these models wasto improve safety design. The simulations are so effective that 5-star crash ratings becamealmost universal and NHTSA had to revise their rating criteria for the 2011 model year. Thesimulations are continuing to rapidly improve, to the point where they are starting to be used tosimultaneously optimize the material composition, shape, and thickness of every individual part,including secondary weight reductions.This shift in material design capabilities also impacts the cost to reduce vehicle weight. Previouslightweight material cost studies did not assess part interactions and secondary weightreductions. While they may have accurately reflected historical costs for lightweight materials,they all overstate the cost of future vehicle weight reduction. Studies in progress by Lotus andFEV are using highly sophisticated simulation models to optimize part materials and design. Theresults of these studies will be far more accurate of future designs and must be used to assessweight reduction costs for the final rule.ICCT is also paying FEV to do additional teardown cost assessments in connection with our work in Europe. These include updating the P2 hybrid costs and new cost assessments for advanced diesel engines, basic stop-start systems, manual transmissions, and cooled EGR systems. These results will be shared with EPA and NHTSA as they become available.ICCT will address the impacts of technology benefit and cost on consumer welfare in our writtencomments.SafetyICCT will address the safety issues in more detail in our written comments, including the resultsfrom DRI’s latest safety analyses. I will just make two quick observations here. First, every timeKahane reanalyzes the impact of mass reduction on fatalities, the fatality increase goes down. InKahane’s latest study, he concluded, “potential combinations of mass reductions that maintainfootprint and are proportionately somewhat higher for the heavier vehicles may be safety- neutralor better as point estimates and, in any case, unlikely to significantly increase fatalities.”Second, and more importantly, the coefficients in Kahane’s modeling reflect the materialcomposition in historical vehicles, which is dominated by conventional steel. Thus, themodeling results implicitly assume that lighter vehicles do not change material composition.However, future weight reduction will be accomplished primarily with the use of high strengthsteel and aluminum and with better vehicle design. High strength steel and aluminum both have better crash properties than standard steel. Reducing weight of small cars using these better materials will improve their crash performance and reduce fatalities. In fact, Honda has movedaggressively towards the use of HSS in small cars in part due to the safety benefits.

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