In 1975, as part of the response to the Arab oil embargo of 1973–1974, the U.S. Congress and President Richard Nixon passed the Energy Policy and Conservation Act. One of a number of provisions in this legislation intended to decrease fuel consumption was the establishment of fuel economy standards for passenger cars and light trucks sold in the United States. These Corporate Average Fuel Economy (CAFE) standards require that each manufacturer's entire production of cars or trucks sold in the United States meet a minimum average fuel economy level. Domestic and import cars and trucks are segregated into separate fleets, and each must meet the standards individually. Any manufacturer whose fleet(s) fails to meet the standard is subject to a fine, based on a CAFE shortfall times the total number of vehicles in the particular fleet. Manufacturers are allowed to...