CAFE

It may not be apparent to American motorists, but the U.S. oil refinery industry is ailing. Reduced VMT, mandated ethanol use, and escalating vehicle fuel efficiency standards caused a decrease of gasoline consumed. Diesel may revive the industry.

In a remarkable show of cooperation between the auto industry and the administration, the two agreed upon the highest increase since the advent of fuel efficiency standards. Current standards require 35.5 mpg by 2016 - safeguards exist for problems.

Gas prices have been dropping for a month. According to the chief oil analyst with the Oil Price Information Service in this radio interview, expect prices to continue dropping to as low as $3.25 a gallon, but don't expect lower than $3.00.

In Portland, patterns of urban use are emerging that are similar to the European-style neighborhood bar as a community gathering place.

Normally fuel economy standards are set by the National Highway Traffic Safety Administration. Due to the 2007 Supreme Court ruling on the Clean Air Act, the new rules are jointly issued by the EPA to regulate tailpipe emissions as well as CAFE.

The current government strategy to increase fuel efficiency is to mandate it through increases in the Corporate Average Fuel Economy standards, currently set for 35.5 mpg by 2016. In this piece, auto executives suggest a better way - using gas taxes.

Testifying to the Senate Environment & Public Works Committee on July 14, DOT Secretary Ray LaHood clearly states that fuel efficiency must be complemented with livable communities and transit to reduce transportation-related carbon emissions.

This editorial suggests three strategies to make the American auto fleet more efficient: renewing the hybrid tax credit program (many credits have been exhausted), pursuing a "cash for clunkers program", and increasing the gas tax to supplement CAFE.

Fortune Magazine's Martin Sloan is interviewed on Marketplace on why he thinks it would be good for Detroit, and America, to have a higher gas tax. At the same time, he has advice to Congress as to what they should do with fuel-efficiency standards.