President Obama today (July 29) formally unveiled new fuel-economy standards, saying the stepped-up miles-per-gallon requirements represent the most significant step that the U.S. has taken to wean itself off foreign oil.
The Wall Street Journal reported that the President, speaking at a convention center in the nation’s capital, said that with gasoline prices “killing people at the pump,” the new fuel standards will help people save money.
The new proposal by the Obama administration would increase corporate average fuel economy, or CAFE, to 54.5 miles a gallon between 2017 and 2025.
Several automakers disclosed their support for the regulations. Scott Becker, a Nissan Motor Co. senior vice president of administration and finance, called the proposal’s fuel-economy and emissions targets “extremely challenging,” but said the company “is up to the task.”
Chrysler Group LLC said it supports the agreement, reached with the auto industry and environmentalists, “in principal” and as part of a continuing program. As part of the agreement, regulators agreed to a review of the costs and progress of achieving the goals before some of its toughest conditions on pickup trucks and SUVs take effect.
The leeway for trucks had been a sticking point for Japanese auto makers, which rely far less on larger trucks and more on cars and smaller sport-utility vehicles and pickup trucks for their profits than do Detroit auto makers.
The new proposal calls for a 5% average annual increase in fuel economy for cars and a 3.5% increase for light trucks through 2021. After 2021, both cars and trucks face a 5% annual increase.
The government announced tough new fuel-economy standards in a proposed rule that also would place the first nationwide limits on vehicles’ greenhouse gas emissions, blamed for global warming, according to USA Today.
The Obama administration outlined its targets in May, but final details were uncertain until the joint announcement by the federal Department of Transportation and Environmental Protection Agency.
The rules would phase in with 2012 models, when the current rules end, and escalate so that by the 2016 model year, the industry would have to average the equivalent of 35.5 miles per gallon.
The administration estimates the rules would add an average of $1,100 to the price of a car but could save $3,000 on fuel over the vehicle’s life.
New rules were required by Congress in the Energy Act of 2007. The proposal will be open to public comment for 60 days before it can become final.
The current rules call for 2009-model cars to average 27.5 mpg and trucks, 23.1 mpg. But the National Highway Traffic Safety Administration reported in March that today’s new cars actually average 32.6 mpg and trucks, 24.2.
To hit the 2016 targets, automakers plan to field more small cars and smaller engines with advanced technology. Ford Motor plans to bring an array of its small, European-market cars. Fiat-controlled Chrysler will sell versions of the Italian maker’s small cars. General Motors Co. plans to boost its offerings rated 30 mpg or more on the highway by 65%.
The proposed rules are partly a compromise to head off a patchwork of state rules. California, since joined by 13 other states and the District of Columbia, tried to impose its own greenhouse gas (ghg) limits, which are directly tied to fuel economy. “The administration proposal is identical to California’s,” said Mary Nichols, head of the state’s Air Resources Board. She applauds that for the first time both better mileage and ghg limits are required. Says Jim Kliesch, senior engineer at the Union of Concerned Scientists, “You have to go back to the days of disco to see a fuel-economy improvement like this.”
Details, quirks and loopholes in the proposal:
- If an automaker exceeds its target, it can bank the extra mileage as credit against future shortfalls.
- The industry goal is 35.5 mpg, but targets will vary by company, based on its mix of vehicles. A small-car specialist would have a higher target than a company with a wider range of vehicles.
- Because the rules include emissions, the overall standard isn’t strictly 35.5 mpg and could be as low as 34.1 mpg. Automakers would get credits for cutting ghg emissions in other ways besides burning less fuel, such as preventing air conditioning leaks. The coolant is 300 times worse on the ghg scale than carbon dioxide, the engine ghg.