Automakers, Oil companies bicker over who’s responsible for high gas prices
Rhett A. Butler, mongabay.com
April 12, 2006
According to The Wall Street Journal automakers and oil companies are bickering over who is to blame for high oil prices.
In an unusually public exchange, Jason Vines, vice president of communications for DaimlerChrysler’s U.S. arm criticized Exxon Mobil Corp., the world’s most profitable company, in a blunt blog posting.
The paper reports,
Auto makers “have spent billions developing cleaner, more efficient technologies,” Mr. Vines wrote. “Big Oil would rather fill the pockets of its executives and shareholders, rather than spend sufficient amounts to reduce the price of fuel, letting consumers, during tough economic times, pick up the tab.”
The posting was in part a response to a recent Exxon Mobil ad in several newspapers that put the onus for today’s energy crunch on auto makers. Under a cartoon of a monster sport-utility-vehicle filling up at the pump, the ad hinted that blame lies with an auto industry that knows how to build more-fuel-efficient vehicles but isn’t rolling them onto the market.
Noting that the average fuel economy of new U.S. autos hasn’t improved in two decades, the ad argued that improvements in engine efficiency have been “largely offset” by the rising weight of vehicles, notably pickup trucks and sport-utility vehicles.
2005 was a year of record profits for oil companies and record losses for American car companies. Further, analysts note that American car companies are lagging far behind their foreign counterparts in adopting and promoting hybrid technologies.
Average fuel economy of new U.S. cars and trucks has not improved in more than 20 years.
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Using ethanol — alcohol produced from corn or other plants — instead of gasoline is more energy-efficient than oil say researchers at the University of California, Berkeley In a study published in Friday’s issue of the journal Science, Berkeley scientists show that producing ethanol from corn uses much less petroleum than producing gasoline, though they concede that there is still great uncertainty about greenhouse gas emissions and other environmental effects like soil erosion. Nevertheless the research suggests that at minimum, ethanol is a good substitute for gasoline and thus can help lessen the country’s reliance on imported oil. The study undermines critics who say that the push for ethanol is based solely on intense lobbying by the farm industry.
Source: “As the Price of Gasoline Takes Off, Oil and Auto Firms Trade Barbs” by Jeffrey Ball. The Wall Street Journal – April 12, 2006