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U.S. Congress pushes up fuel economy standards.
Finally some meaningful action on both global warming and our dependence on foreign oil. 
Congress wants to increase CAFE standards by 40% which seems like a lot but in reality it is only 15% higher then the fuel economy standards we actually achieved in 1987. Still, it is a great thing for America and the world.
Congress wants to increase CAFE standards by 40% which seems like a lot but in reality it is only 15% higher then the fuel economy standards we actually achieved in 1987. Still, it is a great thing for America and the world.
Congress Agrees to Increase Fuel Standard to 35 MPG (Update4)
By Gopal Ratnam and Ryan Flinn
Dec. 1 (Bloomberg) -- Congress agreed to raise fuel-economy standards by 40 percent for cars and light trucks by 2020 in a move described by lawmakers as a historic step toward cutting U.S. oil consumption and curbing global warming.
The new rules would require the U.S. to set mileage standards for each type of vehicle to meet a national average of 35 miles per gallon. In exchange for a higher benchmark than automakers had wanted, the industry would continue to get credit for making vehicles that run on alternate fuels such as gasoline blended with ethanol.
``This landmark energy legislation will offer the automobile industry the certainty it needs, while offering flexibility to automakers and ensuring we keep American manufacturing jobs and continued domestic production of smaller vehicles,'' House Speaker Nancy Pelosi said in a statement.
The deal ends almost six months of opposition by the industry and marks the first overhaul of fuel-economy rules in three decades. Automakers argued that complying with a 40 percent increase would cost them billions of dollars that would be passed on to consumers. Environmental groups waged a multimillion-dollar campaign against the industry and urged lawmakers to act.
The proposal, worked out by House and Senate negotiators late yesterday, is part of a larger energy bill scheduled to be voted on in both houses of Congress this month and will include new goals for renewable sources of energy. The bill must be signed by President Bush before it becomes law.
Awaiting Details
The White House withheld comment until aides review specifics. ``No one has seen its details,'' spokesman Trey Bohn said in an e-mail.
Pelosi, a California Democrat, held out for a tougher fuel- economy position against the industry, which was backed by Michigan Democrat John Dingell, chairman of the House Energy and Commerce Committee.
Dingell, on a conference call today, said he will strongly support the bill. ``We have a pretty good compromise here, but not everyone is satisfied with everything,'' he said.
``This tough, national fuel-economy bill will be good for both consumers and energy security,'' said Dave McCurdy, president of the Alliance of Automobile Manufacturers, which represents General Motors Corp., Toyota Motor Corp. and seven other U.S. and overseas-based automakers. ``We support its passage.''
GM Chief Executive Officer Rick Wagoner said the rules pose ``a significant technical and economic challenge to the industry.''
GM's Plan
The Detroit automaker will attempt to reach the goals ``with an array of engineering, research and development resources. We will continue our aggressive pursuit of advance technologies that will deliver more products with more energy solutions to our customers,'' Wagoner said in a statement.
GM Vice Chairman Bob Lutz said in June that meeting higher mileage standards would cost $6,000 per vehicle and force the automaker to add gasoline-electric hybrid systems to most new models.
Environmental groups that campaigned for the tougher standards hailed the compromise.
``If the House and Senate finally approve this deal and the president signs it, they will all have done more for consumers at the pump than any Congress or Administration since the 1970s,'' Phyllis Cuttino, director of the Pew Charitable Trusts Campaign for Fuel Efficiency, said in a statement.
Senator Dianne Feinstein, a California Democrat and lead author of the Senate's 35-mpg proposal approved in June, called the deal ``historic.''
Separate Categories
Under the measure, the need for each automaker to meet a fleet mileage standard for cars and light trucks would be eliminated. Instead, the National Highway Traffic Safety Administration would set rules for each type of vehicle in an automaker's fleet based on size, weight and other characteristics.
The current standard is 27.5 mpg for passenger cars and 22.2 for light trucks.
Automakers would continue to get mileage credit for making vehicles that run on alternate fuels such as E85, a blend of 85 percent ethanol and gasoline. The credit would be phased out starting in 2014 and be eliminated by 2020.
Dual Fleets
Some automakers including Nissan Motor Co. wanted to eliminate the distinction between domestic and foreign-made fleets that would have allowed them to freely import fuel efficient vehicles to meet the new mileage standard.
The legislation, instead, would preserve the distinction, a key demand of the United Auto Workers union. Eliminating the so- called dual-fleet rule would allow automakers to shift small-car production outside the U.S. and lead to domestic job losses, the union said.
The compromise would also eliminate loopholes, or so-called off-ramps, that would have allowed NHTSA to recommend a lower standard if it didn't see the 35-mpg goal as cost effective, Feinstein said.
Automakers selling fewer than 64,000 vehicles annually would no longer be exempt from the standards.
The negotiations followed a surge in the price of gasoline past $3 a gallon and a push by a coalition of states, environmental groups and consumers for lawmakers to cut oil imports and curb pollution.
Congress established the so-called CAFE standards in 1975 in response to the 1973-74 Arab oil embargo that caused shortages at U.S. gasoline stations. New car-fleet economy, set at 12.9 mpg in 1974 according to the Congressional Research Service, was ordered to reach 18 mpg by 1978. Light trucks were required to achieve 17.2 mpg by 1979.
NHTSA set truck standards for subsequent years and imposed fines for noncompliance. Attempts by legislators to raise mileage goals from the early 1990s through 2006 were defeated.
To contact the reporter on this story: Gopal Ratnam in Washington at gratnam@bloomberg.net
Last Updated: December 1, 2007 15:58 EST
By Gopal Ratnam and Ryan Flinn
Dec. 1 (Bloomberg) -- Congress agreed to raise fuel-economy standards by 40 percent for cars and light trucks by 2020 in a move described by lawmakers as a historic step toward cutting U.S. oil consumption and curbing global warming.
The new rules would require the U.S. to set mileage standards for each type of vehicle to meet a national average of 35 miles per gallon. In exchange for a higher benchmark than automakers had wanted, the industry would continue to get credit for making vehicles that run on alternate fuels such as gasoline blended with ethanol.
``This landmark energy legislation will offer the automobile industry the certainty it needs, while offering flexibility to automakers and ensuring we keep American manufacturing jobs and continued domestic production of smaller vehicles,'' House Speaker Nancy Pelosi said in a statement.
The deal ends almost six months of opposition by the industry and marks the first overhaul of fuel-economy rules in three decades. Automakers argued that complying with a 40 percent increase would cost them billions of dollars that would be passed on to consumers. Environmental groups waged a multimillion-dollar campaign against the industry and urged lawmakers to act.
The proposal, worked out by House and Senate negotiators late yesterday, is part of a larger energy bill scheduled to be voted on in both houses of Congress this month and will include new goals for renewable sources of energy. The bill must be signed by President Bush before it becomes law.
Awaiting Details
The White House withheld comment until aides review specifics. ``No one has seen its details,'' spokesman Trey Bohn said in an e-mail.
Pelosi, a California Democrat, held out for a tougher fuel- economy position against the industry, which was backed by Michigan Democrat John Dingell, chairman of the House Energy and Commerce Committee.
Dingell, on a conference call today, said he will strongly support the bill. ``We have a pretty good compromise here, but not everyone is satisfied with everything,'' he said.
``This tough, national fuel-economy bill will be good for both consumers and energy security,'' said Dave McCurdy, president of the Alliance of Automobile Manufacturers, which represents General Motors Corp., Toyota Motor Corp. and seven other U.S. and overseas-based automakers. ``We support its passage.''
GM Chief Executive Officer Rick Wagoner said the rules pose ``a significant technical and economic challenge to the industry.''
GM's Plan
The Detroit automaker will attempt to reach the goals ``with an array of engineering, research and development resources. We will continue our aggressive pursuit of advance technologies that will deliver more products with more energy solutions to our customers,'' Wagoner said in a statement.
GM Vice Chairman Bob Lutz said in June that meeting higher mileage standards would cost $6,000 per vehicle and force the automaker to add gasoline-electric hybrid systems to most new models.
Environmental groups that campaigned for the tougher standards hailed the compromise.
``If the House and Senate finally approve this deal and the president signs it, they will all have done more for consumers at the pump than any Congress or Administration since the 1970s,'' Phyllis Cuttino, director of the Pew Charitable Trusts Campaign for Fuel Efficiency, said in a statement.
Senator Dianne Feinstein, a California Democrat and lead author of the Senate's 35-mpg proposal approved in June, called the deal ``historic.''
Separate Categories
Under the measure, the need for each automaker to meet a fleet mileage standard for cars and light trucks would be eliminated. Instead, the National Highway Traffic Safety Administration would set rules for each type of vehicle in an automaker's fleet based on size, weight and other characteristics.
The current standard is 27.5 mpg for passenger cars and 22.2 for light trucks.
Automakers would continue to get mileage credit for making vehicles that run on alternate fuels such as E85, a blend of 85 percent ethanol and gasoline. The credit would be phased out starting in 2014 and be eliminated by 2020.
Dual Fleets
Some automakers including Nissan Motor Co. wanted to eliminate the distinction between domestic and foreign-made fleets that would have allowed them to freely import fuel efficient vehicles to meet the new mileage standard.
The legislation, instead, would preserve the distinction, a key demand of the United Auto Workers union. Eliminating the so- called dual-fleet rule would allow automakers to shift small-car production outside the U.S. and lead to domestic job losses, the union said.
The compromise would also eliminate loopholes, or so-called off-ramps, that would have allowed NHTSA to recommend a lower standard if it didn't see the 35-mpg goal as cost effective, Feinstein said.
Automakers selling fewer than 64,000 vehicles annually would no longer be exempt from the standards.
The negotiations followed a surge in the price of gasoline past $3 a gallon and a push by a coalition of states, environmental groups and consumers for lawmakers to cut oil imports and curb pollution.
Congress established the so-called CAFE standards in 1975 in response to the 1973-74 Arab oil embargo that caused shortages at U.S. gasoline stations. New car-fleet economy, set at 12.9 mpg in 1974 according to the Congressional Research Service, was ordered to reach 18 mpg by 1978. Light trucks were required to achieve 17.2 mpg by 1979.
NHTSA set truck standards for subsequent years and imposed fines for noncompliance. Attempts by legislators to raise mileage goals from the early 1990s through 2006 were defeated.
To contact the reporter on this story: Gopal Ratnam in Washington at gratnam@bloomberg.net
Last Updated: December 1, 2007 15:58 EST
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