Tailpipe controls, 35.5-mpg standard set for '16

Obama links tailpipe emissions to strict fuel rules

David Shepardson / Detroit News Washington Bureau

Washington -- The Obama administration will unveil tough national tailpipe emissions limits and mileage requirements today, forcing automakers to dramatically boost the efficiency of vehicles by 2016 and reshaping what Americans will drive.

By 2016, passenger cars must average 39 miles per gallon and light trucks 30 mpg. A senior administration official said the proposal will boost the price of the average price of a vehicle by $1,300 -- or $600 more than the per vehicle increase predicted under a Bush administration fuel efficiency proposal.

The proposal will force automakers to meet a fleetwide average of 35.5 mpg by 2016 -- four years ahead of what Congress required in 2007, when it mandated 35 mpg by 2020. The higher costs could add $13 billion to $20 billion annually in total new car costs.

Administration officials said the new requirements would save 1.8 billion barrels of oil and eliminate 900 million metric tons of greenhouse gases -- the equivalent to taking 177 million cars and trucks off the roads.

The administration agreed to impose national emissions rules that are the equivalent of what California has sought since 2002 -- a major victory for that state, though it won't get to run the program. Along with 13 other states, California has fought to impose a 30 percent reduction in tailpipe emissions.

Automakers won a single, national standard and technical changes in California's rules that will put them in harmony with federal fuel economy requirements. The struggling companies also will get to lobby the federal government to award them credits to make it easier to meet the rules, and they'll avoid new state-by-state requirements.

The landmark compromise will result in more vehicles with less-powerful engines, more hybrids and more diesels.

Two standards combined

The plan coordinates two separate standards for fuel efficiency and greenhouse gas emissions from vehicles, aiming for cars that achieve higher miles per gallon and have lower-polluting air conditioning systems.

General Motors Corp. President and CEO Fritz Henderson, Ford Motor Co. CEO Alan Mulally, Chrysler Chairman and CEO Robert Nardelli, Daimler AG CEO Dieter Zetsche, Toyota's top U.S. executive Jim Lentz and UAW President Ron Gettelfinger will be at the White House today when President Barack Obama announces the deal. Top execs from Honda and Volkswagen AG will also attend. So will Michigan Gov. Jennifer Granholm, California Gov. Arnold Schwarzenegger and Massachusetts Gov. Deval Patrick.

"What's significant about the announcement is it launches a new beginning, an era of cooperation," said Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers, the group that represents Detroit's Big Three automakers, Toyota, Daimler and six other automakers.

"This is doable," McCurdy said, while acknowledging there would be significant costs.

Congressional leaders also are working to pair the new requirements with billions more in aid for struggling automakers.

Big 3 faced eroding position

The automakers had lots of good reasons to make a deal, including little leverage, as Congress and the EPA are increasingly controlled by strong supporters of California's efforts.

GM and Chrysler have accepted more than $22 billion in government loans; Ford has said it could need government loans if the economy worsens dramatically. Major foreign automakers -- such as Toyota and Honda Motor Corp. -- have prided themselves on their environmentally friendly reputations.

California and the 13 other states have long sought to impose their own tailpipe emissions standards, but were stymied by the Bush administration, which refused to grant them a waiver under the Clean Air Act to do so. Automakers fought in court for years to block the standards and lobbied government officials to stop them.

The Obama regulation, which major automakers back, will order the Environmental Protection Agency and National Highway Traffic Safety Administration to work together to set the new tailpipe emissions limits and mileage standards -- a linkage the automakers said was critical. Automakers will have the right to push for credits toward meeting tailpipe emissions requirements, as they have for fuel economy standards. The two agencies also will use NHTSA's "footprint" or attribute-based system to set tailpipe emissions requirements -- something California's rules didn't include.

The new joint EPA-NHTSA regulation will take effect with the 2012 model year -- nearly 2 1/2 years from now.

'Following California's lead'

California officials declared victory. Sen. Barbara Boxer, D-Calif., chairwoman of the Senate Environment and Public Works Committee, said the government was "following California's lead."

"This is good news for all of us who have fought long and hard to reduce global warming pollution, create clean energy jobs, and reduce our dangerous dependence on foreign oil," she said.

Sen. Carl Levin, D-Detroit, said the new regulation "will provide predictability and certainty for the auto companies in meeting regulations, which the industry apparently believes it can achieve over a realistic timeframe."

Secret talks between automakers and many states took place in recent months to reach a deal. As part of the pact, automakers will drop their long-running legal challenges.

dshepardson@detnews.com (202) 662-8735