Bush Leaves Fuel Economy Targets for Obama to Set
Thursday, January 8, 2009
Citing "recent financial difficulties of the automobile industry," the Bush administration said it would not issue interim targets for higher vehicle fuel efficiency, leaving it up to the incoming Obama administration to steer auto companies toward better mileage standards.
Democrats and environmental groups had mixed reactions, on the one hand criticizing the Bush administration for dragging its feet while on the other welcoming the chance for the new administration to set its own guidelines.
The guidelines must be issued no later than April 1 so auto companies have time to engineer 2011 models. "Now more than ever automakers need certainty, and this decision only further delays their ability to finalize future product plans," said Charles Territo, a spokesman for the Alliance of Automobile Manufacturers.
Legislation enacted in 2007 raised the corporate average fuel efficiency standard to 35 miles a gallon by 2020, up from the current level of 27.5 miles a gallon. To sweeten the deal for auto companies, Congress adopted a $25 billion loan program for advanced technologies.
The Transportation Department was given responsibility for setting targets for the intervening years. Last fall, the department circulated a proposal that was more aggressive than some analysts had expected, requiring auto companies to build new cars averaging as much as 31.8 miles a gallon by 2015. But final guidelines were not issued.
"While the Bush administration ran out of gas implementing the fuel economy law, with a new Obama administration we expect it to be full speed ahead towards ending our dependence on oil," said Rep. Edward J. Markey (D-Mass.), chairman of the House Select Committee on Energy Independence and Global Warming. "Once again the Bush administration has blown it on the environment," said Dan Becker, director of the Safe Climate Campaign. But Luke Tonachel, vehicles analyst with the Natural Resources Defense Council, said this "gives the Obama administration an opportunity to move quickly under the nation's clean air and energy laws to raise fuel economy and cut heat trapping pollution from new cars and trucks."
Higher fuel efficiency for cars has been a priority for many members of Congress, who have pushed the carmakers to build more fuel-efficient vehicles if they are to expect federal aid to avoid bankruptcy. In addition, the state of California is pressing for a waiver from the federal government so it can set standards for automobile tailpipe emissions that would effectively set more stringent mileage guidelines.
Barclays Capital auto analyst Brian Johnson said that meeting the interim targets in the Transportation Department's draft proposal should not be difficult for automakers.
"It's really the 2020 standards that were more of a stretch," he said. The goals for 2014, he said, could be met "with turbo chargers and a modicum of hybrids." More widespread use of turbo chargers could boost fuel efficiency by as much as 20 percent, he said.