The New York Times (Washington, D.C.) - The Obama administration and the auto industry are locked in negotiations over new vehicle mileage and emissions standards that will have a profound effect on the cars Americans drive and the health of the auto industry over the next decade and beyond.
Depending on the stringency of the standards, the deal also could reduce global-warming emissions by millions of tons a year and cut oil imports by billions of barrels over the life of the program, cornerstones of President Obama's energy policy.
The Environmental Protection Agency, the National Highway Traffic Safety Administration and the California Air Resources Board, which has led the nation in setting tough standards, are proposing regulations that would require new U.S. cars and trucks to attain an average of as much as 56.2 miles per gallon by 2025, roughly double the current level. That would require increases in fuel efficiency of nearly 5 percent a year from 2017 to 2025.
The United States has the world's most lenient vehicle emissions and mileage standards, lagging as much as 10 mpg behind the rest of the world. Europe is expected to reach about 60 mpg by 2020.
The administration's proposed standard on vehicle fuel efficiency would put the country on a par with that in Europe, China and Japan, saving consumers billions of dollars at the pump and creating for the first time a truly global automobile market.
Automakers say the standard is technically achievable. But they warn it would cost billions of dollars to develop the vehicles, and they express doubt that consumers would accept the smaller, lighter — and in some cases, more expensive — cars.
"We can build these vehicles," said Gloria Bergquist, vice president for public affairs at the Alliance of Automobile Manufacturers, the leading industry lobby in Washington, D.C. "The question is, will consumers buy them?"
Talks have heated up and will continue through summer, with the proposed standards expected in September and completed early next year after public hearings.
Auto companies are asking the government to phase in the mileage standard gradually, to allow credits for using certain technologies and fuels and to include a review period that could lower the target if it proves too costly, industry and government officials said. They also seek assurances that the government would help build charging stations needed for electric and plug-in hybrid-electric vehicles, which would help to meet the new standard.
A senior administration official, insisting on anonymity because negotiations were continuing, said the 56.2 mpg goal represented the government's opening bid, and might not be the final figure.
Arriving at a new mileage rule was particularly difficult, the official added, because the auto industry has not recovered fully from the recession and the government was trying to force technological change more than a decade in the future.
On that, industry and government agree.
"It is very challenging," Mark Reuss, president of General Motors North America, said of the 56.2 mpg goal last week. "But it's up to us as engineers to provide high value to the customer and support the environment."
The auto companies and the government are returning to a familiar battleground, which the industry dominated for decades beginning in the 1970s, using its clout to keep fuel-economy standards low. But two years ago, when Chrysler and General Motors were clinging to life and the rest of the industry was slumping, automakers agreed to aggressive new nationwide fuel-economy standards covering the years 2012-2016. That deal, announced by Obama in May 2009 as a dozen auto executives looked on, raises the domestic car and light-truck fleet fuel economy to 35.5 mpg by 2016.
The government now wants to extend that mandate nine years, but is confronting a much healthier and feistier industry.
Lobbyists are in full swing. Auto companies are seeking a standard at the lower end of the range proposed by the government, citing studies that say meeting the stiffer regulation would add thousands of dollars to the cost of a new vehicle and require a significant downsizing of vehicles in all classes. They also want certainty that there will be a single national standard and that California will not be permitted to pursue a tougher standard.
The National Auto Dealers Association said in a statement that hybrids and plug-in electric vehicles now account for less than 3 percent of the domestic market, while meeting the new standard could require the fleet to be more than 50 percent hybrid or electric, an assertion disputed by advocates of the new rule.
"The auto companies went along with the first round begrudgingly," said Roland Hwang, transportation program director at the Natural Resources Defense Council. "Two companies were in bankruptcy, and the industry had lost credibility and a lot of political capital in Washington. Now they know a second round is going to happen, but their goal is to make it as weak as possible."
It is possible that the top-line mileage figure will be at or near the administration's bid of 56.2 mpg, but that could mask a number of adjustments and loopholes, environmental advocates contend.
Companies could receive credit for using low-polluting air-conditioner refrigerants, building cars that can run mainly on biofuels, putting solar panels on cars to provide cooling power and other gimmicks.
"The companies want the lowest number and all the flexibility mechanisms underneath it," said Brendan Bell, a transportation analyst with the Union of Concerned Scientists. "What matters to us and to other environmentalists is how much oil does it save and how much pollution does it avoid. We need a strong number and a program with integrity."
