Reps Reach Fuel Efficiency Deal

Fingers crossed, we just might see the first major change in U.S. fuel efficiency standards in nearly three decades. While not as efficient as the European Union (where fuel efficiency standard is 40 miles per gallon), the U.S. auto makers will have to ensure that their fleets have, on average, an FES of 35 MPG by 2020. At present, the U.S. standards stand at 27.5 MPG for cars and 22.2 MPG for light trucks. The fuel efficiency standards are referred to as CAFE, which stands for corporate average fuel economy standards.

The new standards still make a distinction between “cars” and “light trucks,” which includes minivans, SUVs and pickups, but would require an overall fleet average of 35 MPG. The implications of this change are huge — it could save millions of tons of carbon dioxide gases from being emitted, and cut down on more than hundreds of millions of gallons of gasoline consumed.

This has been a crucial sticking point in the 2007 Energy Bill. Lawmakers announced late Friday that they had reached a deal on the CAFE standards. These negotiations were led by Speaker Nancy Pelosi and auto industry advocate Rep. John Dingell (RD-MI). The bill is expected to be voted on later this week, as we had previously reported.

The measure, which was included in the Senate version of the 2007 Energy Bill, has had its share of detractors. Dragged kicking and screaming through the process, American automakers claim these new measures will cost them tens of billions of dollars and will hurt both the consumers and the manufacturers, The New York Times reports.

Another crucial part of this bill is that now the enforcement is strictly in the hands of the states. Dingell had wanted emissions standard to lie exclusively within National Highway Traffic Safety Administration jurisdiction, and not the EPA or individual states. Earlier this year, the Supreme Court upheld California’s right to legislate and enforce emissions standards stricter than federal regulations. EPA authority was a “deal breaker” for Pelosi.

The Energy Bill is still far from being approved, and has faced a good deal of opposition from some of the most powerful lobbies in Washington, notably those of auto, oil and utility. But now it looks to actually be putting into law mandates that will greatly increase cleantech opportunities in the automotive, biofuel and utility-level power generation sectors.

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