U.S. Senate Approves Auto Mileage Plan

WASHINGTON, June 21, 2007; John Crawley writing for Reuters reported that the U.S. Senate approved legislation on Thursday that would for the first time in 30 years force automakers to produce vehicles that get sharply higher fuel mileage.

In a surprise voice vote, senators approved a compromise amendment to an energy bill 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 co-sponsor of the compromise plan.

Some industry officials bristled at the description of the final Senate initiative as a compromise but major auto companies had no immediate comment after passage of the initiative, which would also reduce carbon emissions.

One senior congressional aide said the auto industry and its allies in the Senate, unhappy with the amendment after failing to garner support for a more palatable alternative, had mounted a last-minute campaign to delay or possibly kill the overall energy bill.

Auto companies have said a strict requirement could financially devastate struggling Detroit companies, including General Motors Corp., Ford Motor Co., and Chrysler Group.

But lawmakers said provisions in the final product 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 administer's CAFE rules, called the measure a "step backward" because it would give regulators and industry too much discretion. 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.

NO CAFE NUMBER IN BILL

Key Democrats, including Dianne Feinstein of California, Carper, and John Kerry of Massachusetts, negotiated with key Republicans, like Ted Stevens of Alaska and Olympia Snowe of Maine, to craft several changes from their original proposal, which was stricter.

Under their compromise, lawmakers would leave it up to regulators to determine feasible standards under the federal Corporate Average Fuel Efficiency program, beginning with model year 2011 vehicles.

Automakers had lobbied against a specific CAFE target but proponents of tougher rules, including some environmentalists, say there are few viable alternatives to CAFE in the near term to achieve meaningful fuel savings.

The Senate plan also puts sharper focus on industry efforts to accelerate development of gasoline-electric hybrids, electric vehicles or those that run on a mix of gasoline and alternative fuels, like ethanol.

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 class of vehicles based on size and weight.

An energy bill in the House of Representatives is moving forward without vehicle fuel economy changes.