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E-M:/ Report: Increasing Fuel Efficiency Saves Jobs and Money

For Immediate Release
Thursday, June 23, 2005

CONTACT:  Vicki Levengood
National Environmental Trust / MI
 517-333-5786 office, 517-256-6789 cell

As Crude Oil Tops $60 / Barrel, NET Report Concludes:

Increasing Fuel Efficiency Saves Jobs and Money

Lansing, MI ? A report released today by the National Environmental Trust (NET) finds that sustained high oil and gas prices produce a substantial strain on the United States? economy, particularly the domestic auto industry. Oil Prices, Fuel Efficiency, and U.S. Auto Industry Employment shows that if the U.S. auto industry does not respond to rising oil prices by producing more fuel efficient vehicles, there will be a substantial decrease in auto industry employment.Raising the Corporate Average Fuel Economy (CAFE) standard for passenger cars and light trucks will reverse this job loss and save consumers money, with a negligible change in auto industry profits.

?In the last month, both General Motors and Ford have laid off thousands of workers, landing a serious blow to Michigan?s economy,? said Vicki Levengood, Michigan Representative of the National Environmental Trust.?Today, crude oil hit a record-breaking $60 a barrel.What this research tells Congress is that acting on fuel economy could help consumers and workers caught in this economic squeeze.?
The report is based on a study NET commissioned from Redefining Progress, an economic and public policy organization.Redefining Progress modeled the auto industry under conditions of sustained high oil prices and compared auto industry performance measures with and without higher fuel economy standards. The study concludes that a higher CAFE standard would provide a number of economic benefits:

·Gasoline Savings: 10% savings per year in gasoline costs for Americans. 
·More Jobs: Net gain of 15,000 auto-industry jobs. 

·Virtually No Drop In Profits: Auto-industry?s profit growth would decrease by only 0.2% when compared with no efficiency improvement. 

?Soaring gasoline prices have already cost the average American between $130 and $190 more this year alone,? said David Gard, Energy Policy Specialist with the Michigan Environmental Council. ?Consumers are eager to buy more efficient American-made vehicles.President Bush and his allies in the Senate could enable this by raising fuel economy standards."

Oil prices have reached near record levels of $60/barrel at the same time gas prices are at an all-time high, averaging $2.16/gallon.In response to these rising prices the auto industry has began to lay off thousands of works.On June 21, Ford Motor Company announced it will lay off 1,700 workers in addition to the 1000 workers laid off in April.General Motors also announced it plans to lay off 25,000 autoworkers.

?If Congress and the President are serious about protecting the environment, creating new jobs and reducing our dependence on foreign oil, they will move to increase fuel efficiency standards,? said Vicki Levengood.?Everything else is just window dressing.?

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Report Link: http://www.net.org/reports/energy/CAFE_summary.pdf