The Wall Street Journal‘s recent article on compact pickup trucks and rising gas prices has raised the tantalizing prospect of a return to the glory days of the compact pickups. But from what we hear, it would be premature to get your hopes up just yet.

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Canada’s government is seen as reluctant to tackle the issue of climate change. Concerned Canadians have even taken to discussing how putting a Canadian flag on one’s backpack may be dangerous because our lack of environmental leadership has diminished our standing in places like Europe. Or at least that’s what one eco-conscious party guest told me, in between agitating for more bike lanes and asking for a lift home.

Since motorists and drivers are low-hanging fruit without any kind of organized lobby, our Conservative government has decided to offer up the automobile as a sacrificial lamb in the PR temple by implementing CAFE-style standards on Canadian vehicles. As we all know, CAFE is a deeply flawed system that rewards the bad guys. So why would Canada, a land of small cars and high gas prices, do this?

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Automakers looking for a bit of a break with CAFE compliance can now get a 2 for 1 special on EVs.

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Close your eyes and imagine it’s 1979. A first-term Democratic president struggles with unemployment, malaise, high energy prices, and embassy trouble. The landscape of today looks like the landscape of then, but there’s one important thing missing: The compact pickup. Where did they go? The small pickup was an indelible symbol of America’s lowered expectations in the Seventies and Eighties. Now that crappy times are here again, where are the paper-thin truck beds and wheezy-but-indestructible four-cylinders to pull them?

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It’s the kind of mistake that only a blogger (said with a contemptuous sneer) would make. The Wall Street Journal reports that

“U.S. regulators rated a new Chrysler Group LLC compact car with highway fuel-economy of 41 miles a gallon, a move that fulfills a key element of the company’s 2009 federal bailout and cleared the way earlier this year for majority owner Fiat SpA to increase its stake in the Detroit auto maker.”

They got it wrong.

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I’m still making my way through the tome that is the CAFE regulations, but Sergio Marchionne already know what’s up – maybe all that time he saves by not picking out his outfit each day has something to do with it.

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Fuel economy standards for the year 2025 have now been set, as the government released the finalized CAFE regulations, in a massive tome totaling 1,994 pages in PDF form

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Bloomberg is reporting that House Republicans, led by California Congressman Darrell Issa, are set to produce a report that heavily criticizes CAFE as a politicized move designed to curry favor with bailed out auto makers and environmental groups.

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The Wall Street Journal’s Driver’s Seat touches on the muscle car segment, and whether they’ll fall pitfall to rising gas prices in the future, CAFE regulations or some combination of the two. Among the solutions brought up in the article – by Chrysler executives, no less – is “a high output four-cylinder engine”.

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The Detroit News interviewed presidential hopeful Mitt Romney on Tuesday, and the Republican candidate-to-be shared his thoughts on government ownership of GM stock and the future of CAFE.

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Marty Nemko is the  “The Bay Area’s Best Career Coach”, and a contributor to The Atlantic as well as U.S. News, the Washington Post, Los Angeles Times, and San Francisco Chronicle. So what makes him qualified to sound off on raising the CAFE standard to 100 MPG.

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UAW president Bob King endorsed the 54.5 MPG CAFE standard for passenger vehicles while testifying at CAFE related hearings in Detroit. Automotive News quoted King as saying “The proposed rules are sensible, achievable and needed.” The standards would have to be met by 2025 and work out to about 40 mpg in the real world.

The car industry is under pressure to improve fuel efficiency. It is not that they have been sitting on their thumbs. Automakers have achieved large increases in fuel efficiency through better technology in recent decades, says MIT economist Christopher Knittel.

The problem is:

“Most of that technological progress has gone into compensating for weight and horsepower.”

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Reasonable minds can disagree about the wisdom of the auto bailout, but according to analysis by the EPA and Department of Transportation (based on data from the Department of Energy and auto forecasters CSM), the Government’s rescue of GM and Chrysler may not have been the best idea (at least from a market perspective). According to data buried in the EPA/DOT proposed rule for 2017-2025 fuel economy standards [PDF here], Fiat-Chrysler is predicted to be the sick man of the auto industry by 2025, losing over half of its 2008 sales volume, while GM is expected to improve by only 3%, the second-worst projected performance (after Aston-Martin). In terms of percentages, even lowly Suzuki and Mitsubishi are projected to grow faster than The Mighty General. Ouch.

On the other hand, the proposed rule notes that data will be finalized before the final rule comes out. Besides, the agencies appropriately admit (in as many words) that projecting auto sales so far into the future is one hell of a crapshoot. Still, with the obvious exception of “Saab-Spyker” and with some skepticism about the projection’s optimism about overall market growth aside, these are not the craziest guesses I could imagine. Who knows what the future holds, but it certainly is a bit troubling that the government’s own data suggests the two automakers it bailed out may well have some of the weaker performances of the next 14 years. At least the Treasury could have sold off their remaining GM stock before this report was released…

Over the last few days we’ve been discussing the implications of the growing gap between global oil demand and production, looking at the responses of a global automaker, a radical startup and the oil industry itself. And make no mistake, it’s an uncertain future out there… unless you’re selling cars in the US. In that case, your future just arrived, planned all the way through 2025. That is, if you think this proposed rule will survive four presidential elections and one industry-government “mid-term review.” Want to familiarize yourself with this pre-planned fuel economy future? All 893 pages await your perusal, in PDF format here. Or, hit the jump for a few broad strokes.

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