Senate Rebuffs Automakers, Raises CAFE Standard to 35 mpg by 2020

Jan. 1, 2020
For the first time in more than two decades, automakers will be required to meet a large increase in fuel mileage requirements. By a margin of 65-to-27, the U.S. Senate passed a sweeping energy bill (S. 1419), ending a test of wills with the auto, oi
WASHINGTON WATCHSenate Rebuffs Automakers, Raises CAFE Standard to 35 mpg by 2020Energy Legislation Before the 110th Congress: * S. 1419: The U.S. Senate's "Renewable Fuels, Consumer Protection and Energy Efficiency Act of 2007" seeks to move the United States toward greater energy independence and security; to increase the production of clean renewable fuels; to protect consumers from price gouging; to increase the energy efficiency of products, buildings and vehicles; to promote research on and deploy greenhouse gas capture and storage options; and to improve the energy performance of the federal government.
* H.R. 6: The U.S. House of Representatives' "CLEAN Energy Act of 2007" aims to reduce the nation's dependency on foreign oil by investing in clean, renewable and alternative energy resources; promoting new emerging energy technologies; developing greater efficiency; and creating a Strategic Energy Efficiency and Renewables Reserve to invest in alternative energy.

For the first time in more than two decades, automakers will be required to meet a large increase in fuel mileage requirements. By a margin of 65-to-27, the U.S. Senate passed a sweeping energy bill (S. 1419), ending a test of wills with the auto, oil and power utility industries, which had fought and lobbied against many of the bill's targets. Congress last passed a federal auto fuel economy standard in 1975. Moreover, the current requirement for cars of 27.5 miles per gallon (mpg) has not changed since 1989. 

Senator Harry Reid (D-NV), Senate majority leader and the bill's sponsor, and other Democrats insisted that despite having to give up some measures in the Senate, once the House takes up a companion bill, they would be able to further advance their agenda. The House bill is targeted for a vote before the July congressional recess.

Automakers rebuffed Automakers and their industry associations have called the proposed standards extreme, saying it would cost them tens of billions of dollars to comply: "Any fuel economy increase has to be responsible, and it's got to comprehend the fundamental differences between cars and light trucks," stated Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, which represents General Motors (GM), Ford, DaimlerChrysler, Toyota, BMW and other automakers. Despite heavy lobbying, the automakers were unable to avoid or reduce the bill's impact. The average fuel mileage standard will increase by 40 percent to 35 mpg by 2020, up from the current requirements of 27.5 mpg for passenger cars and 22.2 mpg for vans, SUVs and light trucks. Notably, for the first time in history, SUVs, vans and small trucks will have to meet the identical regulatory standard as passenger cars.  Senator Carl Levin (D-MI), who tried unsuccessfully to broker the softer 30-mpg standard supported by the automakers, noted one reason for his effort's failure: "The public wants action, rightfully so, on global warming," he said.  Although the auto industry had pushed hard for a 30 mpg standard by 2020, Senate lawmakers were able to push through the legislation to keep the 35-mpg standard by deleting a provision that would have required a 4 percent annual increase after 2020 through to 2030, ending with a 52-mpg standard. The bill is expected to eventually reduce gasoline consumption by more than 1 million gallons of gasoline a day in the United States. The bill also includes other provisions: Grants, loan guarantees and other assistance are outlined that will promote research into fuel-efficient vehicles, including hybrids, advanced diesel and battery technologies. In addition, price-gouging measures were included that make it unlawful to charge an "unconscionably excessive" price for oil products, including gasoline. It also gives the federal government new teeth by granting it the authority to investigate oil industry market manipulation.Far from a complete victory While the bill eventually passed handily, two provisions of the original legislation failed to make it through to the final Senate vote, the result of more effective lobbying efforts of some other industries opposed to it. One scuttled requirement, named the "Renewable Portfolio Standard," would have required power utilities to derive 15 percent of their power from renewable sources of energy by 2020.  In addition, the Senate abandoned a plan for a $29 billion increase in taxes on oil companies which would have raised funds earmarked to provide tax breaks and incentives for the continued development of renewable energy sources, such as solar and wind power, ethanol, biodiesel and more. Consequently, while the bill calls for a vast 600 percent expansion of renewable alternative fuels to 36 billion gallons a year by 2020, little funding is provided to motivate that change.Round two Reid voiced his displeasure with the two setbacks in the Senate. "Republicans continue to pander to the big oil and energy companies repeatedly demonstrating that they do not care about the priorities of the American people, throwing up roadblocks at every turn instead of working with us to reduce skyrocketing gas prices."  Before the legislation becomes law, the bill must be passed by the House, where Reid expects the battle will be vigorously renewed. House Speaker Nancy Pelosi (D-CA) has previously said tough legislation is needed to realize reductions in auto gasoline use and dependency on foreign oil.  While Representative John Dingell (D-MI), the chairman of the Energy and Commerce Committee, has ruled out action until the fall, Pelosi and other House Democrats are poised to push for action as early as next week. The automakers, power utilities and oil interests are expected to lobby hard once again, but this time round, the House could be a more formidable force - as the Democrats hold a much larger 54 percent majority there.(Source: U.S. Senate)We welcome your comments and topic suggestions.
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