Post by TonyV on Apr 2, 2010 0:44:18 GMT -5
Last Updated: April 02. 2010 1:00AM .
Fuel efficiency rules demand 40% mpg boost by 2016
Landmark fuel standard means consumers will pay more for vehicles but less at the pump
David Shepardson / Detroit News Washington Bureau
Washington -- The Obama administration finalized landmark rules Thursday that will boost car and truck fuel efficiency to 34.1 miles per gallon and dramatically alter the vehicles Americans drive.
The new regulations will increase fuel efficiency 40 percent by 2016 and impose the first limits on auto tailpipe emissions, reducing greenhouse gases by more than 30 percent.
The U.S. Environmental Protection Agency said the action is equal to taking 42 million cars off American roads.
The rules represent a watershed compromise among automakers, environmentalists, the Obama White House and 14 states, led by California, that wanted to set their own.
Automakers, who for years held off costlier federal standards, agreed to the deal in May, having exhausted their options.
The struggle isn't over, however, since the regulations expire after 2016. Unless a new pact is reached, California and other states then could impose their own rules.
Transportation Secretary Ray LaHood promised Thursday that "post-2016 work will begin as soon as the ink is dry" on these original standards.
The new rules will cost automakers $52 billion and add about $950 to the price tag of a new car by 2016. To meet them, automakers will have to convince Americans to buy more expensive hybrids or diesels and smaller, less-powerful and lighter-weight vehicles.
But the government estimates that motorists will save $152 billion in fuel costs and says those savings will offset higher vehicle selling prices in three years of driving.
On the downside for the automakers, some analysts say sales could drop if motorists, having paid more for their vehicles, hold on to them longer.
"Under these new mandates, the price of new cars and light trucks will rise significantly, meaning fewer Americans will be able to buy the new vehicles of their choice," said Ed Tonkin, chairman of the National Automobile Dealers Association.
Furthermore, the government says cheaper travel may encourage motorists to drive more, leading to additional congestion, accidents and even fatalities because of the shrinking size of some vehicles. That potentially could cost between 100 and 350 additional lives a year, according to the National Highway Transportation Safety Administration.
The regulations boost the fleetwide fuel economy requirement to 34.1 mpg by 2016.
NHTSA predicts that passenger cars will have to average 33.3 mpg in 2012, and 37.8 mpg in 2016. Light trucks, including SUVs, pickups and vans, will be required to average 25.4 mpg in 2012 and 28.8 mpg by 2016.
The new regulations allow automakers to get credits for building flex-fuel vehicles, which run on E85 or gasoline, until 2015. But after that, they must show the alternative fuel is being used to get credits.
EPA Administrator Lisa Jackson called the standards "a victory for our planet and everyone who knows that we must take action today and not push the challenge of climate change off to the next generation."
The government says the total value to society in reduced gasoline use and lower emissions will be about $240 billion, so the net benefit is about $190 billion.
The Alliance of Automobile Manufacturers, the trade group representing Detroit's Big Three, Toyota Motor Corp. and seven others, praised the announcement. But it wants the government to start working on the rules for 2017 and beyond.
"America needs a road map to reduced dependence on foreign oil and greenhouse gases, and only the federal government can play this role," said Dave McCurdy, president and CEO of the alliance. "The national program announced (Thursday) makes sense for consumers, for government policymakers and for automakers."
General Motors and U.S. Rep. John Dingell, D-Dearborn, a longtime defender of the auto industry, concurred.
"While these requirements are very challenging, we feel confident that GM will be able to achieve the mandated fleet fuel economy targets," the automaker said in a statement.
"Looking ahead, we urge the administration to continue pursuing a national approach for setting vehicle fuel economy requirements beyond the 2016 model year as well."
Dingell added that Congress and the administration "must promptly begin working on the same national approach for subsequent model years."
The new rules give longer lead-in time to specialty automakers such as Porsche and BMW.
Automakers that sold fewer than 400,000 vehicles in 2009 will be able to meet a less-stringent greenhouse gas standard. That will be limited to up to 100,000 vehicles total, spread over 2012-15.