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New Fuel Economy Standards Signal End for the V-8

Bush signs bill setting 35-mpg fuel economy standard

By Joe Benton
ConsumerAffairs.com

December 20, 2007

Bush signed the energy bill that includes an increase in mileage for cars and trucks to 35 mpg by 2020 in a ceremony at the Energy Department.

The mileage increase is a result of the shift in political control of Congress to the Democrats and their campaign to cut greenhouse gas emissions.

Members of both political parties and a handful of auto industry representatives attended the bill signing.

Automakers fought the increases in fuel-economy mandates but caved in at the end in an effort to win regulatory certainty for future product planning.

The bill will require a 40 percent increase in car and truck fuel economy standards by 2020 when a 35 mpg fleet average is required.

The gradual implementation of the tougher standards begins with the 2011 model year.

"This country needs to have a comprehensive energy strategy," Bush said at the bill signing.

The energy bill will also provide at least $90 million a year for research to bring plug-in hybrids to the consumer market.

Congressional approval of the new corporate average fuel economy standards (CAFE) followed a compromise in which Democratic leaders agreed to remove tax increases and other provisions that would have required utilities to use more renewable fuels.

President Bush had threatened to veto the bill unless the $22 billion in tax hikes were deleted.

The new law requires a dramatic increase in alternative fuel production and provide incentives for production and purchase of energy-efficient products.

Reluctance in Detroit

U.S. automakers along with Toyota Motor Corp. reluctantly supported the new CAFE provisions in an effort to convince lawmakers that fuel economy standards should take precedence over greenhouse gas emission rules.

The automakers tried to craft a bill that would limit the scope of the Environmental Protection Agency to set fuel economy standards or states to limit green house gas emission.

After a series of court rulings, the EPA now has broad power to control greenhouse gas emissions from cars and trucks and automakers are concerned the agency will set rules tougher than those set by Congress or the National Highway Traffic Safety Administration.

Michigan Democrat Carl Levin had tried to win some protection for Detroit automakers by adding a statement that Congress and federal auto safety regulators have the final say over fuel economy rules.

Democratic Senator Dianne Feinstein of California, who is the primary sponsor of the fuel economy provision said the energy bill is not intended to prevent state or federal governments from imposing additional greenhouse gas rules.

In the end, the Senate dropped several other incentives aimed at helping the auto industry meet the new standards, such as a $25 billion loan guarantee program for updating assembly plants.

California gas

Environmental Protection Agency Administrator Stephen Johnson announced the rejection of the California request for a waiver under the Clean Air Act.

“The Bush Administration is moving forward with a clear national solution not a confusing patchwork of state rules to reduce America’s climate footprint from vehicles,” Johnson said.

California and 14 other states want to enforce greenhouse gas emission limits on cars and trucks starting with 2009 models. The principal target is carbon dioxide which is a byproduct of burning gasoline and diesel fuel.

Automakers fought the state efforts contending that the industry could not comply with state-by-state rules.

California plans to go to court to overturn the EPA ruling.

House Speaker Nancy Pelosi, who is a Democrat from California, said, “We will examine this decision closely as part of our broader efforts to ensure America’s energy security.”

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