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  Geotimes - June 2007 - Energy & Resources
New standards for fuel economy proposed 
Mineral resource of the month: Steel

As summer approaches, Americans may find driving around a bit more expensive than last year. On May 14, the national average for regular gasoline hit $3.10 per gallon, up 22 cents in three weeks, surpassing the record of $3.06 (in nominal dollars) set after Hurricane Katrina struck in 2005 and just 12 cents shy of the all-time high of $3.22 (when adjusted for inflation) set in March 1981, according to the U.S. Energy Information Administration. As gas prices increase, discussions on fuel economy standards also are also picking up across the country and on Capitol Hill.

At stake is the miles-per-gallon efficiency of entire fleets of new passenger cars and light trucks, called the corporate average fuel economy (CAFE) standards. The federal government first implemented CAFE standards in 1975. For the next 10 years, the standards led to a 75 percent increase in fuel economy of passenger cars, according to a 2002 National Academy of Sciences study. But since 1985, the fuel economy of new passenger cars as tested by the Environmental Protection Agency has remained stagnant.

“We cannot turn back the clock to reclaim lost opportunities, but we must take the necessary steps to reduce fuel consumption in the passenger fleet now,” said Sen. Daniel Inouye (D-Hawaii) at a hearing of the Senate Committee on Commerce, Science and Transportation March 6. To that end, Inouye and many others on the Hill and in the White House are working to increase the CAFE standards and raise fuel efficiency, despite disenchantment among some automakers that think changes in standards should be left to the National Highway Transportation Safety Board rather than Congress.

Currently, the congressionally mandated standard fuel economy is 27.5 miles per gallon for passenger cars, and 24.1 miles per gallon for light trucks and SUVs. In January, President Bush called for a 4 percent increase per year in the standards — to 34 miles per gallon for cars — by 2017, starting in 2011.

Congress has answered, proposing several bipartisan bills this spring that all seek to increase CAFE standards to various degrees. One Senate bill mandates that standards for both cars and light trucks rise to 35 miles per gallon by 2019, while another bill sets the same standards but allows the government to scale them back if the target is deemed too expensive or infeasible. Another Senate bill does not address light trucks, but raises standards for passenger cars to a minimum of 40 miles per gallon by 2017.

On May 4, Inouye and Sen. Ted Stevens (R-Alaska), the top two senators on the commerce committee, agreed to a compromise bill that incorporates parts of each of the Senate bills being considered. The amended bill mandates a national CAFE average of 35 miles per gallon for both cars and light trucks by 2020. After 2020, fuel economy standards will have to improve by an additional 4 percent each year. It also requires that larger vehicles, which are not covered by the normal standards, increase in fuel efficiency by 4 percent each year, starting in 2011.

The compromise bill does, however, offer the U.S. Department of Transportation the option to decrease the CAFE standards if the increase is not technologically feasible. The bill “not only answer[s] our national security interest in reducing our dependence on foreign oil sources,” but it is “also an approach that would avoid the unintended consequences that would adversely affect the domestic auto industry and consumer choices,” said Stevens, who surprised industry insiders with his tough bill. Though the bill has a lot of support, it is unclear when it will come to the full Senate floor. Similar bills are at various stages in the House of Representatives.

Just how much to change fuel economy standards, and how much that change will help to reduce America’s fuel consumption habits and thus greenhouse gas emissions, remains a big question. “The answer is, ‘potentially a lot over the long run,’ depending on the final value set,” says Lee Schipper, director of research at EMBARQ, the World Resources Institute’s Center for Sustainable Transport in Washington, D.C.

“The bottom line is that in spite of high fuel prices, consumer expenditures for gas are still well below where they hurt,” Schipper says, “so car buyers are fairly indifferent” to fuel efficiency. Sure, he says, when gas prices go up, people grouse, but they don’t drastically change their habits. Consumers may drive slightly less or buy slightly smaller cars, but it is not enough to change the marketplace significantly, he says. What would change the marketplace significantly and reduce gasoline usage would be a combination of stronger standards and raising gas taxes, which the government should do, he says.

“No strategy that doesn’t take tax incentives into consideration will ever be effective by itself in the long run,” Schipper says. “We are stuck in the mud, and somehow we’re going to have to get unstuck,” he says.

Megan Sever

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Michael D. Fenton, a U.S. Geological Survey mineral commodity specialist, has compiled the following information about steel, a metal critical to the industrial base of the United States.

About 96 million metric tons of steel was produced in the United States last year — more than any other metal. And the $3.46 billion of iron and steel scrap exported was also the highest of any metal scrap export, helping to reduce the U.S. trade deficit.

As to when the first iron was used is lost to antiquity. It may have been recovered from meteorites. Later, iron metal was derived from iron oxides in a smelting procedure similar to that used to produce copper from copper oxides. After the beginning of the Iron Age, about 3,200 years ago, knowledge of iron- and steel-making spread from the ancient Middle East through Greece to the Romans and then to Europe. The first furnace to operate successfully in North America was in 1646, in what is now Saugus, Mass. The size and efficiency of furnaces increased rapidly until the mid-19th century, when the Bessemer converter was invented. Because it could convert batches of up to 25 metric tons or more of molten iron into steel, it made the modern age of steel possible.

Pig iron is a high-carbon alloy made by smelting iron ore in a blast furnace with carbonaceous material, usually coke, as a reducing agent. Limestone is added to the iron ore-coke mix to remove impurities. Iron is refined in a basic oxygen converter to steel, which is then passed through continuous casting machines that produce plates, sheets, bars and other flat-rolled products. Steel is also made by recycling ferrous scrap in an electric arc furnace.

Although there are thousands of proprietary grades and hundreds of standard grades of steel based on chemistry, three major categories of steel exist: carbon, alloy and stainless. About 91 percent of the U.S.- made steel is carbon steel, which actually contains no more than 2 percent carbon. The construction, automotive, shipbuilding, containers, and packaging, appliances, machinery and equipment industries are the primary consumers of this type of steel. Alloy steel, about 6 percent of annual steel production, contains as much as 4 percent alloying elements, including chromium, copper, molybdenum, nickel, titanium, tungsten and vanadium. Alloy steels are used to manufacture specialty machine parts and tools, among other applications. Chromium and usually nickel are added to steel to make it highly corrosion resistant, forming stainless steel, which is about 3 percent of annual U.S. steel production.

China led the world in steel production in 2006, producing 420 million metric tons, or 35 percent of the world’s total, and maintains 32 percent of global steel-making capacity. Japan was second in steel production, accounting for 114 million metric tons, or 9 percent of both the world’s total and capacity. The United States was third, accounting for 96 million metric tons, or 8 percent of both the world total and capacity. For the first time, steel production exceeded consumption in China in 2006. This caused Chinese steel exports to reach a record high, 110 percent greater than that of 2005, while steel imports were down 28 percent compared with those of 2005. The net result was an influx of steel products into the United States from countries having excess steel-making capacity that would normally have exported to China. China states that it is attempting to reduce steel production by closing low-capacity mills having high energy consumption and high pollution, raising power charges to mills and consolidating smaller, less-efficient mills. Company consolidation continues throughout the steel industry worldwide, with larger companies now beginning to dominate the industry.

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