U.S. to Decree Stricter Fuel Goals

May 18, 2009 07:00 PM
 

via a special arrangement with Informa Economics, Inc.

Another clear signal that Obama administration will bring major changes

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


President Obama will today announce the U.S.'s first attempt at official emissions limits for cars and trucks, as well as requiring a new standard of 35.5 mpg, four years ahead of the schedule Congress laid out in a 2007 energy law (a 5 percent annual increase in fuel economy for model years 2012 through 2016).

Facts and figures. Passenger cars would need to meet a 39 mpg average by 2016 and light-trucks will be pushed to 30 mpg by the same year. Currently, cars need to average 27.5 mpg and trucks 23.1 mpg. The White House said the average fuel efficiency for the current model year is 25 mpg.

California connection. The policy for autos will harmonize the corporate average fuel economy, or CAFE, standard and the Environmental Protection Agency's greenhouse-gas standard. That way, officials explain, industry will not have to worry that the administration will regulate those on separate tracks. The standards will be gradually increased each year after 2012 until they hit Obama’s targets in 2016. California had been seeking permission to establish its own greenhouse-gas reduction standard for tailpipe emissions but now can be expected to ultimately accept the federal standard. (The new federal standards would be less stringent than California's effort would have been for its first two years, but the two standards will align by 2015.)

Impacts: The move will cost consumers another $1,300 per vehicle by 2016, officials said. The plan would save 1.8 billion barrels of oil through 2016 and would be the environmental equivalent of taking 177 million cars off the road. The new rules will add an expected $600 to the cost of an average car, which in part will be absorbed because of the higher miles per gallon impact of the new standard. The Detroit Free Press said "the rules could radically reshape the U.S. automotive industry by forcing automakers to push higher levels of technology such as hybrid-electric drives into vehicles faster than once planned."

What others are saying: ABC World News said, "Environmental groups are hailing this as the first major step ever by the United States to curb global warming." The proposals "are sweeping," and while "the auto industry has long opposed these moves...this time" it is "onboard. The Washington Post noted that David McCurdy, president of the Alliance of Automobile Manufacturers, said that the agreement reached late Sunday night would provide the industry with “clarity and predictability.” The new rules will add an expected $600 to the cost of an average car, which in part will be absorbed because of the higher miles per gallon impact of the new standard.


Comments: Think the last election wasn't about BIG changes ahead? This is one of several if not many major proposals which will likely be approved and will impact a host of industries -- including the business of agriculture -- before Obama and his team of changers are completed. Included on that list is antitrust matters which could include seed and chemical companies, along with the railroad industry. Also ahead are some major changes in immigration reform, but Obama and congressional Democrats will not complete immigration reform until the U.S. economy turns around and the unemployment numbers start decreasing.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

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