Senate approves new auto fuel standards

The Senate approved a proposal on Thursday that would for the first time in 30 years force sharp increases in auto fuel standards and impose other measures to make vehicles more efficient and cut dependence on imported oil.
In a surprise voice vote, senators approved a compromise amendment that would require an improvement in the average efficiency of the new U.S. vehicle fleet from 25 miles per gallon now to 35 mpg by 2020, about a 4 percent annual increase.
"If we're really smart, we'll find a way to make this new approach to fuel efficiency work -- to make it work for domestic auto companies, their shareholders, their employees and our nation to reduce our dependence on foreign oil," said Sen. Thomas Carper, a Delaware Democrat and co-sponsor of the compromise plan.
Industry officials bristled privately at the description of the final Senate initiative as a compromise, but major auto companies had no immediate comment on the proposed change in Corporate Average Fuel Economy and other mandates, which would also reduce carbon emissions if it is enacted into law.
The energy bill cleared the chamber late on Thursday night.
Auto companies have said a strict efficiency requirement could financially devastate struggling Detroit manufacturers, including General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group.
But lawmakers said provisions in the fuel amendment were achievable.
"It will not do damage to the industry. It will not take away your pickup truck," said Sen. Byron Dorgan, a North Dakota Democrat.
Joan Claybrook, president of Consumer Group Public Citizen and a former head of the agency that administers CAFE rules, called the measure a "step backward" because it would give regulators and industry too much discretion on how to achieve mileage targets. The Consumer Federation of America praised the bill, saying it will cut oil imports by 15 percent and reduce tailpipe emissions by 1 billion tons.
Key Democrats, including Dianne Feinstein of California, Carper, and John Kerry of Massachusetts, negotiated with key Republicans, such as Ted Stevens of Alaska and Olympia Snowe of Maine, to craft several changes from their original fuels proposal, which was stricter.
Under their compromise, lawmakers would leave it up to transportation regulators to determine the maximum feasible standards under the federal CAFE program, beginning with model year 2011 vehicles.
Automakers lobbied against a specific CAFE target but proponents of tougher rules, including some environmentalists, say there are few near-term alternatives to the 1970s-era program for gasoline engines to achieve meaningful fuel savings.
The Senate plan also puts sharper focus on accelerated development of gasoline-electric hybrids, electric vehicles or those that run on a mix of gasoline and alternative fuels, such as ethanol, to help industry achieve the 2020 target.
To that end, the Senate compromise would require the Transportation Department to develop a plan to ensure that 50 percent of vehicles sold in the United States are capable of running on gasoline alternatives by 2015, but only if those products are available and affordable.
The original Senate bill would have required the industry to achieve an additional 4 percent in annual fuel economy gains after 2020, but the compromise permits regulators to determine what additional targets would be feasible.
The Senate bill would require a fleetwide average of 35 mpg by 2020 but some vehicles, like sedans, would continue to perform more efficiently than larger sports utilities, pickups and vans.
Annual goals would be set for each vehicle class -- cars and light trucks, which include sport utilities and pickups -- based on size and weight.
The change could force manufacturers to make uncomfortable decisions about their products, a particularly troubling prospect for U.S.-based manufacturers that have relied on sales of bigger, less-efficient light trucks.
An energy bill in the House of Representatives is moving forward without vehicle fuel economy changes.