President Barack Obama's new fuel and emission standards for cars and trucks will save billions of barrels of oil but are expected to cost consumers an extra $1,300 per vehicle by the time the plan is complete in 2016. Obama planned to announce the first-ever national emissions limits for vehicles, as well as require an overall or industry average fuel efficiency standard at 35.5 miles per gallon.
The plan also would effectively end a feud between automakers and statehouses over emission standards — with the states coming out on top but the automakers getting the single national standard they've been seeking and more time to make the changes.
Obama's proposed change in rules would for the first time combine pollution reduction from vehicle tailpipes with increased efficiency on the road. It would save 1.8 billion barrels of oil through 2016 and would be the environmental equivalent of taking 177 million cars off the road, said senior administration officials speaking anonymously, ahead of the announcement.
New vehicles would be 30 percent cleaner and more fuel-efficient by the end of the program, they said.
The plan, to be proposed in the Federal Register of pending rules and regulations, must still clear procedural hurdles at the Environmental Protection Agency and the Transportation Department. Automakers expressed their support for the plan. "We're all agreeing to work together on a national program," says Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers.
Administration officials said consumers were going to pay an extra $700, anyway, for mileage standards that had already been approved. The Obama plan adds another $600 to the price of a vehicle, a senior administration official said, bringing the total cost to $1,300 by 2016.
That official said the cost would be recovered through savings at the pump for consumers and if gas prices follow government projections.
Under the changes, the overall fleet average would have to be 35.5 mpg by 2016, with passenger cars reaching 39 mpg and light trucks hitting 30 mpg under a system that develops standards for each vehicle class size. Manufacturers also would be required to hit individual mileage targets.
“Car companies might face three different sets of overlapping requirements, one administered by the Department of Transportation, one administered by the EPA, and still a third administered by California and 13 other states,” said Obama in a press conference. “This proposed national policy, under the leadership of two agencies — and bringing together 14 states, 10 companies, as well as auto workers and environmental groups — changes all that.
“The goal is to set one national standard that will rapidly increase fuel efficiency — without compromising safety — by an average of 5 percent each year between 2012 and 2016, building on the 2011 standard my administration set shortly after taking office.”
The auto industry will be required to ramp up production of more fuel-efficient vehicles on a much tighter timeline than originally envisioned. It will be costly; the Transportation Department last year estimated that requiring the industry to meet 31.6 mpg by 2015 would cost nearly $47 billion.
But industry officials — many of whom are running companies on emergency taxpayer dollars — said Obama's plan would help them because they would not face multiple emissions requirements and would have more certainty as they develop their vehicles for the next decade.
“At a time of historic crisis in our auto industry, when domestic auto manufacturers are making painful choices and restructuring their businesses to be viable in the future, this rule provides the clear certainty that will allow these companies to plan for a future in which they are building the cars of the 21st century,” Obama says.
