Deal reached on boosting mileage
By Ken Thomas, The Associated Press
WASHINGTON — The groundbreaking deal in Congress to raise miles-per-gallon standards will compel the auto industry to churn out more fuel-efficient vehicles on a faster timeline than the companies wanted, though with flexibility to get the job done.
The auto industry's fleet of new cars, SUVs, pickups and vans will have to average 35 mpg by 2020, according to the agreement that congressional negotiators announced late Friday. That compares with the 2008 requirement of 27.5 mpg average for cars and 22.5 mpg for light trucks. It would be first increase ordered by Congress in three decades.
Majority Democrats plan to include the requirement in broader energy legislation to be debated in the context of $90-per-barrel oil, $3-plus gas pump prices and growing concerns about climate change. The House plans to begin debate this week.
The energy bill will help accelerate plans by automakers to bring more fuel-efficient technologies to conventional engines and alternatives such as gas-electric hybrids and vehicles running on ethanol blends.
For the first time, for example, manufacturers will receive credits for building vehicles that run on biodiesel fuel.
Domestic automakers and Toyota opposed a Senate bill approved in June that contained the same mileage requirements and timeline. They warned the measure would limit the choice of vehicles, threaten jobs and drive up costs.
The compromise worked out by Rep. John Dingell, D-Mich., House Speaker Nancy Pelosi, D-Calif., and Senate leaders maintains a significant boost in mileage standards while giving the industry more flexibility and certainty as they plan new vehicles.
The proposal would continue separate standards for cars and trucks, extend credits for producing vehicles that run on ethanol blends, and allow automakers to receive separate credits for exceeding the standards and then apply those credits to other model years.
Michigan lawmakers secured an extension of the current 1.2 mpg credit for the production of each "flexible fuel" vehicle, capable of running on ethanol blends of 15% gasoline and 85% ethanol. Without the extension, the credits might have run out by 2010, but under the deal, they will be phased out by 2020.
The United Auto Workers union also won a provision intended to prevent companies from shifting production of less-profitable small cars to foreign plants. At stake are an estimated 17,000 jobs.
General Motors CEO Rick Wagoner said the new rules would "pose a significant technical and economic challenge to the industry."
He said GM would tackle the changes "with an array of engineering, research and development resources."
Environmental groups estimate the deal could save the country 1.2 million barrels of oil per day by 2020 while helping motorists save at the pump.
"Cars are going to be more attractive to consumers because they won't cost as much to own and operate," said David Doniger, director of the climate center for the Natural Resources Defense Council.
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Print | posted on Tuesday, December 04, 2007 3:37 PM