Fuel economy deal is near

Congress today may OK bill to make fleetwide average 35 mpg by 2020.

David Shepardson / Detroit News Washington Bureau

WASHINGTON -- House and Senate negotiators had all but reached agreement late Wednesday on a compromise deal to hike fuel economy requirements to a fleetwide average of 35 miles per gallon by 2020.

A final deal may be announced as early as today that would raise passenger car fuel efficiency standards for the first time since 1983 and hike overall efficiency by 40 percent over the current 25 mpg average.

"We're very close to a deal," U.S. Sen. Carl Levin, D-Detroit, said in an interview Wednesday. "The bumper sticker aspects of the bill may not be significantly altered, but we are providing enough flexibility and practicality to make this achievable."

The "bumper sticker" is 35 mpg by 2020 -- the figure outlined in an energy bill the Senate passed in June. The figure has become immovable in recent months as the House worked on fuel economy legislation after passing an energy bill in August that did not address the issue. House and Senate negotiators have been trying to hammer out a compromise they hope can be supported by both houses of Congress, the White House and automakers.

In the deal that appears imminent, Levin and U.S. Rep. John Dingell, D-Dearborn, chairman of the House Energy and Commerce Committee, have won key concessions to the Senate energy bill.

They include keeping separate fuel economy standards for cars and trucks and extending the credit automakers get for making flex-fuel vehicles that can run on gasoline or E85 ethanol. The credit had become a key sticking point in the negotiations.

They also won a provision supported by the United Auto Workers that is designed to keep an estimated 17,000 small car production jobs in the United States.

In recent months, Dingell spoke repeatedly with the CEOs of Detroit's Big Three automakers to push them to accept fuel economy increases that would be difficult but not impossible to meet. By accepting a deal, Detroit's automakers would win a measure of certainty over the next decade after years of endless debate over raising standards. Despite the concessions, however, the increase in standards, if passed, would represent a major defeat for automakers, who argue it will cost tens of billions of dollars in the next decade to meet the standards and could force them to stop building some of their biggest, most profitable models.

But automakers decided to seek a deal on increases they could live with after their political clout crumbled in Washington over the last year amid a sea of negative court decisions and growing public concern over climate change and imported oil.

The compromise energy bill is expected to also require the use of billions more gallons of ethanol and other alternative fuels and is expected to require automakers to make 50 percent of their vehicles advanced technology vehicles by the middle of the next decade.

A lobbyist for one of Detroit's automakers said the deal is not perfect but will allow the companies to remain competitive.

Levin declined to elaborate on the details of a proposed compromise over the dual-fuel credit automakers get for building vehicles that can run on E85 ethanol, a mixture of ethanol and gasoline. Since 1993, automakers have gotten a 1.2 mpg credit per flex-fuel vehicle. In 2010, federal regulators must decide whether to extend the credit through 2014 at 0.9 mpg. Under the compromise deal, the credit would eventually be phased out, but the details are not clear.

Since ethanol is only at 1,200 of the nation's 180,000 gas pumps, it isn't used in the vast majority of vehicles that run on it. Environmentalists say that has resulted in billions of additional gallons of oil being used.

You can reach David Shepardson at dshepardson@detnews.com.