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Senate Approves Stricter Fuel Standards for Autos

by Pamela Leavey

The Senate voted Thursday night to raise the “fuel-economy requirements for cars and sport utility vehicles, demanding that they get 35 miles per gallon by 2020.” The 65 to 27 vote, “was a major defeat for car manufacturers.”

The lawmakers first announced their agreement on raising the standards, then quickly adopted it by voice, without a roll-call vote. Although the standards are a bit looser than originally called for in the energy bill being debated in the Senate, they are apparently still strict enough to gain the support of environmental interests.

John Kerry, who helped lead negotiations Thursday for a tough compromise, praised the historic Senate agreement, where the Senate is poised to raise CAFÉ standards for the first time in over 30 years. The bill will increase car mileage by 10 miles per gallon by 2020 and these new requirements will cut automobile carbon emissions dramatically. This should help to turn around America’s rapid production of carbon emissions. The oil savings will ultimately total 1.2 million barrels per day by 2020.

“We’ve been fighting to reach this day for over twenty years. Because of an historic bipartisan compromise, for the first time in a generation we’ve overcome powerful opposition to make our cares more fuel efficient. This wasn’t easy, and it didn’t happen overnight, but because of this victory we are providing America a dramatic change in the way we drive and the way we do business. This is a great step toward addressing record gas prices, reducing our greenhouse gas emissions, and breaking the stranglehold of foreign oil. I want to thank my friend Senators Stevens and Cantwell for their hard work and perseverance on this issue.”

Senator Feinstein’s office reported in a press release that “The Stevens-Carper-Feinstein-Snowe legislation fully achieves the goals of the original Feinstein-Snowe Ten-in-Ten Fuel Economy legislation.”

The compromise legislation raises the fleetwide average fuel economy standards for all cars, trucks and SUVs by 10 miles per gallon over 10 years – or from 25 to 35 miles per gallon by Model Year 2020. (A list of key differences between the compromise legislation and the Ten-in-Ten bill follows).

By 2025, the fuel economy increases for cars and light-duty trucks would:

· Save between 2.0 and 2.5 million barrels of oil saved per day, nearly the amount of oil imported today from the Persian Gulf.

· Achieve up to 18 percent reduction of carbon dioxide emissions from anticipated levels, or the equivalent of taking 60 million cars off the road in one year.

· Save consumers $79-98 billion at the pump, based on a $3.00 gas price.

Senator Feinstein said:

“This bipartisan deal achieves the largest fuel economy increase in more than two decades – and it keeps the goals of the Ten-in-Ten legislation intact. So, let there be no doubt, this is a victory for the American public. This bill would increase the fleetwide average fuel economy of cars, SUVs, and light trucks by 10 miles per gallon over 10 years. And it does so in a way that ensures that the U.S. auto industry has the flexibility needed to meet the new fuel economy targets for each class of vehicles. The bill will achieve serious savings for oil, make substantial reductions in greenhouse gas emissions, and put money back in the pockets of American consumers.”

Major Provisions of the Bipartisan Compromise

· Increases fleetwide average fuel economy for all cars, SUVs, and trucks by 10 miles per gallon over 10 years – or from 25 to 35 miles per gallon by Model Year 2020.

· Gives automakers the time and flexibility needed to meet these new fuel economy standards. Requires the National Highway and Transportation Safety Administration (NHTSA) to determine vehicle fuel economy based on their attributes, such as size or weight.

o Each class of vehicles – as determined by NHTSA – will be required to meet the new fuel economy standard for that particular class to achieve the fleetwide average of 35 miles per gallon by 2020. This means that each automaker will no longer be required to average the fuel economy for the entire fleet of cars they produce. This creates a level playing field for all automakers.

o From 2011 to 2019, NHTSA must set fuel economy standards that are the maximum feasible, and ratchet these standards up, making steady progress, to meet the 2020 target of 35 miles per gallon.

o In 2020, the total average must meet 35 miles per gallon, unless NHTSA determines – based on clear and convincing evidence – that the achievement of the 35 miles per gallon standard would not be cost-effective for the nation.

o From 2021 to 2030, NHTSA must set fuel economy standards that are the maximum feasible, and ratchet these standards up at a reasonable rate.

    · Provides manufacturers the flexibility to meet standards using credit system. The Ten-in-Ten bill gives automakers flexibility to meet the standard by establishing a fuel economy credit trading program.

o NHTSA would design, run, and operate this credit trading program.

o The credit trading program gives an automaker a financial incentive to exceed the standards and, if it does, it can:

    § Sell credits to another automaker, and profit from having a more fuel efficient fleet; or

    § Bank its credits for up to five years – insurance if they fall below the standard in a later year.

    § And if an automaker cannot meet the standards in a given year, they can purchase credits, used banked credits, or borrow from projected surpluses from future years.

o This provision was strongly recommended by the National Academy of Sciences in 2002.

    · Protects commercial and work truck fleets while improving fuel efficiency standards.

o For the first time ever, directs NHTSA to develop a structure to evaluate and establish fuel efficiency standards for commercial trucks that increase at the maximum feasible rate.

o Removes work trucks weighing up to 10,000 pounds, such as those used in the agricultural and construction trades, from fuel efficiency standards for passenger cars and light trucks.

· Other provisions:

o Requires the Department of Transportation to improve the fuel economy of medium and heavy duty trucks over a 20 year period, for the first time addressing this sector of concern.

o Automakers that sell less than 0.4 percent of the cars sold in the United States would have their fuel economy standard set by NHTSA at the maximum feasible level outside of the regular car standard. (Currently 0.4 percent of the cars sold in the U.S. each year is approximately 60,000 cars).

o Creates a labeling program to inform consumers of which vehicles are the most fuel efficient and environmentally friendly.

o Requires the federal government to purchase the most fuel efficient cars practicable.

o Provides funding for research and development for fuel saving technologies and grants to expand the availability of alternative fuels from moneys raised by fuel economy civil penalties.

o Requires NHTSA to issue a final rule by 2018 to create safety standards that address the differences between the largest and smallest vehicles.

Key Differences in the Stevens-Carper-Feinstein-Snowe Compromise Amendment

The Stevens-Carper-Feinstein-Snowe compromise amendment makes the following changes to the Commerce Committee-approved legislation:

· Removes the provision that mandated an additional 4 percent annual increase in fuel economy from 2021 to 2030, and replace it with instructions that NHTSA increase fuel economy standards to the “maximum feasible” level. This is the standard currently used by NHTSA to increase SUV standards. In recent years, standards have increased approximately two percent per year.

· Removes the mandate that 50 percent of cars be flex fuel in 2012, increasing to 80 percent in 2015. Replaces with language instructing the DOT to develop a plan to ensure that 50 percent of vehicles sold in the U.S. are alternative fuel vehicles by 2015, taking into consideration the availability of fuel and cost-effectiveness of alternative technologies. Alternative fuel vehicles include but are not limited to flexible fuel vehicles, hybrids, fuel cells, and others.

· Replaces language authorizing NHTSA to use an attribute based system with language requiring NHTSA to use such a system.

· Automakers that sell less than 0.4 percent of the cars sold in the United States would have their fuel economy standard set by NHTSA at the maximum feasible level outside of the regular car standard. (Currently 0.4 percent of the cars sold in the U.S. each year is approximately 60,000 cars).

· The safety rulemaking section to increase vehicle “compatibility” and “aggressivity” would be changed so that it will only address “compatibility.”

The WaPo reports:

The package, which still must pass the House, would also require that the use of biofuels climb to 36 billion gallons by 2022, would set penalties for gasoline price-gouging and would give the government new powers to investigate oil companies’ pricing. It would provide federal grants and loan guarantees to promote research into fuel-efficient vehicles and would support test projects to capture carbon dioxide from coal-burning power plants to be stored underground.

3 Responses to “Senate Approves Stricter Fuel Standards for Autos”

  1. […] le who working on this deal – in an attempt to reach a “tough compromise” – is Senator John Kerry, who wrote a guest post about this matter for The Democratic Daily. From the Times […]

  2. I have given my opinions regarding energy issues over at Feral Scholar (I urge caution visiting his blog; he’s former Special Forces and knows who reads it), around a year ago, particularly with regard to solar power, which I think should be a priority for us to be working on. Increasing fuel efficiency is only a step in the process which ultimately will require weaning ourselves from fossil fuel, which is in finite supply.

  3. Jim,

    It is definitely a multifaceted problem with many, many parts still to be addressed.

    Anybody who owns a blog knows – or can find out- who reads it. Goff is someone I was not familiar with and should be much better known. Thanks for that info.

    My search for your comments was taking a lot of time – as much because I kept getting sidetracked by the level of Goff’s writing and the comments. Can you give a direct link, or date?

    We do use guest columnists and Pamela, as you have probably realized, is very interested and concerned about this. Many voices are needed to keep this issue growing.