Obama Issues Stricter Auto Efficiency Rules

This story appears in the May 25 print edition of Transport Topics.

The Obama administration last week announced stricter requirements for automobile fuel efficiency and a first-ever national greenhouse gas reduction standard for cars and light trucks. Though heavy trucks are not immediately affected, an industry official suggested similar changes could be coming within the next decade.

The plan, which President Obama announced at the White House on May 19, calls for a 30% reduction in carbon dioxide and other emissions from passenger vehicles and light trucks sold in the United States and an overall auto fuel-efficiency standard equaling an estimated 35.5 miles per gallon rating by 2016.

Obama said the standard would save 1.8 billion barrels of oil over the useful lifetime of the vehicles sold in the first five years after they take effect.

“The fact is, everyone wins: Consumers pay less for fuel, which means less money going overseas and more money to save or spend here at home,” Obama said. “The economy as a whole runs more efficiently by using less oil and producing less pollution. And companies like those here today have new incentives to create the technologies and the jobs that will provide smarter ways to power our vehicles.”

Glen Kedzie, environmental affairs counsel for American Trucking Associations, said the rules could signal a tougher overall environmental policy by the Obama administration that could include heavy-truck standards as early as model year 2016.

However, before that policy could take effect, the Energy Independence and Security Act of 2007 required a heavy-truck fuel efficiency study to be completed by March 2010 and a National Highway Traffic Safety Administration fuel efficiency report due in September 2010.

NHTSA then would begin the rulemaking process for fuel efficiency in heavy trucks.

The new car and light truck regulation would be a joint or so-called “harmonized” effort of EPA and NHTSA, a departure from past practice.

A joint federal notice from the agencies said they soon would announce a proposed rule for a strong and coordinated national greenhouse gas and fuel economy program for passenger cars and sport utility vehicles.

The agencies said they would propose a coordinated program to significantly reduce greenhouse gas emissions and improve the fuel economy of light-duty vehicles with reasonably priced commercial technologies.

The new rule is expected to closely follow new greenhouse gas reduction regulations enacted by California environmental authorities and recently given a green light by the U.S. Environmental Protection Agency. California officials have said they will fine-tune their standards and adopt the new federal rules.

The American Clean Energy and Security Act of 2009, marked up by a House committee last week, calls for EPA to begin greenhouse gas reduction rulemaking for new heavy trucks by the end of 2010.

However, at press time, the bill did not call for a joint rulemaking or harmonized approach to the differing tracks EPA and NHTSA have taken “No one’s thinking of harmonization between what’s currently under way in our industry,” ATA’s Kedzie said. “Everyone’s focused on cars, light-duty trucks and SUVs.”

The agencies said their new program would provide regulatory certainty for the automobile industry while remaining sensitive to the “serious current economic situation faced by the industry and many members of the motoring public.”

The new rules, which administration officials said would add $1,300 to the cost of a new car in 2016, have drawn support from the auto industry, environmentalists, federal agencies and many state elected officials.

Although the automobile industry has been fighting fuel-efficiency standards and greenhouse gas reduction targets for decades, Obama said all major automakers had agreed to the overall policy changes.

“We view today’s action by the White House as a necessary step towards establishing a comprehensive national approach for the auto industry to reduce climate-threatening greenhouse gas emissions while significantly improving fuel economy,” Michael Stanton, CEO of the Association of International Automobile Manufacturers, said in a statement.

“President Obama, the state of California, the auto industry and environmental leaders have come together around a global warming solution that will strengthen our economy and put the auto industry on the path to a clean energy future,” said Frances Beinecke, president of the Natural Resources Defense Council.