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Obama administration unveils fuel economy rules

September 16, 2009|Ken Bensinger

The Obama administration's new rules for vehicle fuel economy and first-ever limits on greenhouse gas emissions would dramatically improve the efficiency of America's automotive fleet -- and give the White House a boost in upcoming international climate control talks.

As written, they also allow for integration with California's own controversial vehicle emissions standards, an important key to gaining support from a wide range of automakers, environmentalists and lawmakers.

The proposed rules, issued Tuesday by the Environmental Protection Agency and the Department of Transportation, would go into effect in 2012, ramping up average fuel economy for cars and trucks every year to reach 35.5 miles per gallon in 2016. The current average is 25 mpg.

By providing for a meshing with California's own tough regulations on vehicle emissions, which have already been cleared for implementation, the new federal norms lay the groundwork for the Golden State to lead in development of increasingly rigorous standards beyond 2016, experts said.

"What we're seeing is a real affirmation of California's role in the era of pioneering new vehicle standards," said Roland Hwang, vehicles policy director for the Natural Resources Defense Council. "When it comes to future rules, California is always going to be in the pole position."

The new rules were hailed by automakers, which dropped opposition based on fears that they would be too complex and burdensome. As proposed, they will provide a single set of national standards, rather than a state-by-state approach.

"This historic joint-rule-making proposal . . . creates a coordinated national approach for increasing fuel economy and reducing greenhouse gases and prevents competing regulations at the state and federal level," said Dave McCurdy, president of the Alliance of Automobile Manufacturers.

The group, which represents most of the largest carmakers, had previously raised concerns about the expense of compliance.

Implementing the new rules would cost automakers about $1,100 per vehicle produced, according to the EPA and the National Highway Traffic Safety Administration. The cost is expected to be passed on to consumers.

But that will be offset, the agencies said, by average fuel savings worth $3,000 over the lifetime of a vehicle, and the country as a whole would save nearly 2 billion barrels of oil by 2016.

In addition, the rules represent the first major move to curb greenhouse emissions on a national scale, an important step that the administration is expected to showcase in upcoming multilateral talks on global climate change. Many industrialized nations, including nearly all of Europe, have enforced vehicle emissions standards for several years.

President Obama announced the new rules at a General Motors Co. plant in Lordstown, Ohio.

"It's an action that is long overdue," Obama said. "It will give our auto companies clarity and stability and predictability."

The proposed rules now go through a 60-day public comment period. Final rules must be published by the end of March to provide automakers sufficient production lead time.

Environmentalists and consumer rights activists said they would wade through the massive document, which is more than 1,200 pages, to look for potential loopholes that need to be ironed out. Overall, though, they had few quibbles.

"When the new rules take effect, the average consumer will save around $500 to $650 per year at the pump," said Jack Gillis, director of public affairs at the Consumer Federation of America.

"Instead of being wasted on inefficiency, these consumer dollars will be spent on goods and services in other parts of the economy."

Support was not unanimous, however.

"President Obama's plan will limit consumers' freedom and raise the cost of vehicles by thousands of dollars, which would devastate the already faltering auto industry," said H. Sterling Burnett, senior fellow with the National Center for Policy Analysis, a conservative think tank.

The National Automobile Dealers Assn. also opposes the national rules, breaking ranks with the rest of the auto industry. Last week it joined with the U.S. Chamber of Commerce in filing a lawsuit against the EPA to halt vehicle emissions standards.

"The administration has chosen a needlessly complicated and burdensome path involving three different agencies [NHTSA, the EPA and the California Air Resources Board], each regulating fuel economy under three different statutes," the group said in a statement.

The EPA granted the California Air Resources Board a waiver this year to implement its own vehicle emissions rules, which also have been adopted by 13 other states and the District of Columbia.

Next week the air board is expected to issue modifications to synchronize its rules more fully with the federal standards. The changes are likely to include a provision that would allow automakers to comply with a single average emissions standard rather than a state-by-state patchwork.

Fuel economy standards have not been substantially altered since 1978, and as a result, vehicle efficiency has remained relatively flat despite huge advances in engine and transmission technology.

But the tumultuous events of the last year, including the bailouts and bankruptcies of the old General Motors Corp. and Chrysler, have substantially weakened the industry's resistance to change.

"If you had told me a year ago that we would get to this point, I don't think anyone would have laid money on it," said Transportation Secretary Ray LaHood.


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