Improving Your Mileage
THE ECONOMICS OF FUEL EFFICIENCY
miles / $ (mp$)
I am an engineer, so efficiency is a byword --
everything I engineer, I make as efficiently as possible. And
the most common denominator for efficiency is cost.
In the case of vehicles fuel efficiency, it would be "How
many miles per dollar does my vehicle get?" And, over the years,
"Have all these "efficient” mechanical improvements on my successive
vehicles resulted in more miles to that proverbial dollar?"
| I'm only better off if
all my "mechanical efficiency" efforts results in an improved (lowered) cost
per mile (including amortized cost of "efficiency improvements,") or,
as I like to present it in the inverse -- in more
miles per dollar.
THEN (1994 historical
Twenty year ago I drove a 3,000 pound pick-up that
carried 2-1/2 persons, with a 3-liter V6 gasoline engine. My best mileage
then was 19 mpg, with fuel costing around $1.00/gallon.
That is 19 miles to the dollar (19mpg
¸ 1$pg =
If I want to go visit my relatives 1,000 miles away, it would cost me
$52.63 (1000m ¸
19mp$ = $53.63). That was one-way. Round-trip would double that, or
Adjusting for Inflation
is a way to measure and compare the buying power of the currency over time –
in this case, the US dollar. When we compare costs across years, we must
first convert all costs to a common base. In the example above, I am going
to convert 1994 dollars to 2014 dollars. Because 2014 is the current year
(at the time of this writing) it is also called current dollars. We make
this conversion using the Consumer Price Index (CPI) published by the US
Bureau of Labor Statistics.
THEN (in equivalent 2014
Restating the 1994 costs in 2014 dollars --
Twenty year ago I drove a 3,000 pound pick-up that carried 2-1/2 persons,
with a 3-liter V6 gasoline engine. My best mileage then was 19 mpg, with
fuel costing around $1.36/gallon (in 2014 dollars.)
That is 14 miles to the dollar (19mpg
¸ 1.36$pg =
If I want to go visit my relatives 1,000 miles away, it would cost me
$71.43 (1000m ¸
14mp$ = $71.43). That was one-way. Round-trip would double that, or
Converting 1994 dollars to 2014
ago (in 1994), the US consumer price index (CPI) was 174.4. Today (in 2014)
it is 237.07. The inflation from then to now is a factor of 1.36
(237.07/174.4=1.36). Adjusting THEN (twenty years ago) for inflation
(restating everything in 2014 dollars), we multiply the 1994 costs by 1.36,
which yields a gasoline price of $1.00 in 1994 dollars to be $1.36 in 2014
Often we use subscripts to denote the different dollar bases ($19941.00
NOW (2014 dollars)
Currently I drive a 4,000 pound pickup that carries
five full-sized adults with a 4-liter V6 gasoline engine. My best mileage is
21+ mpg, with fuel costing around $3.50/gallon.
That is 6 miles to the dollar (21mpg
3.50$pg = 6mp$).
If I want to go visit my relatives 1,000 miles away, it would cost me $167
6mp$ = $167). That is one-way. Round-trip would be double that, or $333.
THEN versus NOW
My present vehicle in 2014 is mechanically more
efficient, being bigger, more powerful, faster, carries twice as many
passengers, pulls a much heavier load, and at the same time gets better
mileage than my prior vehicle did in 1994.
I could argue that mechanically, my present vehicle is at least 25% more
efficient as its predecessor twenty years ago, if not 50%. I pay for that
increased mechanical efficiency in the price of the vehicle.
Twenty years ago my old vehicle cost about $20,000 in
1994 dollars, or $27,200 in 2014 dollars. Add on another 25% for
increased efficiency (greater capability), and equivalent price rises to
$34,000. The actual price of my 2014 vehicle is only $30,000.
So, mechanically, the newer vehicle has been very cost effective to buy.
|THEN versus NOW
However, while my present vehicle in 2014 is mechanically more efficient
than its 1994 predecessor, it is not more
economically efficient to operate.
I am worse off
financially than twenty years ago,
because it costs me more than twice as much (in current dollars) to make
that 1000 mile trip – in fact, by a factor of 2.3 ($167
$71.43 = 2.3.)
In fact, I
am so much more worse off that I now seldom contemplate that 1,000 mile
drive, where as twenty years before I would just jump in the vehicle and go,
without any hesitation
While my vehicles have gotten much more efficient
mechanically, the fuel has gotten so much more expensive that it nullifies
all the mechanical improvements.
That is why is it that you and I are worse off economically than we were
twenty years ago (as far as fuel efficiency goes.)
It can all be laid to government policy.
More than twenty years ago the claims by
environmentalist were that oil was a non-renewable energy form, and that we
were running out of it. And, by the way, we were polluting the earth with
all those engine emissions, and destroying the environment, and all those
CO2 emissions were melting the polar ice caps, and we were all going to
drown in rising seas.
So the government (being run by know-nothing idiots) mandated higher
mechanical fuel efficiency, and began issuing regulations (mostly EPA
regulations) that were deliberately designed to drive up the price of
gasoline, diesel, and fuel oils – to make alternate (renewable) fuels more
Part of that regulatory process was discouraging
drilling for oil at home, and increasing reliance on foreign oil sources.
Almost immediately after those policies were put in place, our new
foreign-based oil masters arbitrarily doubled the price of a barrel of oil,
and an artificial shortage was created.
Over the ensuing years the price of a barrel of oil has
continued to rise far more than the inflation of our currency. And that
(government policy), my friends, is near 100% why we are not enjoying the
cost efficiency that we should be.
The solution is rather simple – get rid of all those
(largely) EPA rules and regulations that are arbitrarily chocking off the
supply of oil, and unnecessarily driving up the price per barrel -- so the
price per barrel can drop down to real free-market driven prices.
What about all those environmental claims about running out of oil,
polluting the environment, melting the polar ice caps, and all of us
drowning in rising seas?
Well, none of that is true. In reality, we are
nearly drowning in oil.
Twenty years later on, we have more proven oil reserves than ever
|Technological advances (such as fracking) allow
us to economically extract twice as much oil from formerly abandoned oil
fields, plus all the oil fields that were formerly uneconomical to develop
(such as tar sands and shale oil fields), plus all the new finds at home,
nearby, and around the world.
all the environmentalist claims that carbon emissions are catastrophically
increasing the mean temperature of the earth, the polar ice caps are
melting, and the sea levels are rising – none of that has actually
That is a song the environmentalist have been singing for twenty years and
more – and none of it has rung true.
Oh, it is true that the polar ice caps melt around the edges in their summer
season. But they refreeze in their winter season. And when one polar ice
cap is in summer melt, the other is in winter re-freeze. And the polar ice
that does melt is sea ice – already floating on the sea -- so no net
increase in sea levels.
Now that we know the facts, we have the power to undo the economic damage
that has been wrought upon us. Demand your politicians undo the
regulations, or be voted out of office.
through inaction allowed our foot to be nailed to the floor. We have the
power to pull that nail – by raising our voices and casting our votes.
© 2014, Simon R. Mouer III, PhD, PE
All rights reserved.