Higher Fuel Efficiency Standards Approved by House

The U.S. House of Representatives Thursday approved the Energy Independence and Security Act, a comprehensive bill that includes historic changes to corporate average fuel economy (CAFE) regulations. The bill now goes to the U.S. Senate where passage is not certain. And then, if it clears the Senate, it could face a Presidential veto.

Ironically, given the heated public debate over CAFE this year, the remaining controversy is about other issues. The auto industry, the UAW, and their champions in the Congress now support the compromise reached.

The CAFE changes are sweeping. By 2020 the new vehicle fleet will need to attain 35 miles per gallon, 40 percent higher than the standard is today—the first significant increase in over 20 years. For the first time the standards for both cars and light trucks will be coordinated and set by one agency (NHTSA with input from EPA and Energy).

Several key provisions were key to UAW and the auto industry support. The UAW successfully lobbied for continuing to protect small-car production in the U.S. by applying the car CAFE standard separately to import and domestic cars. The flex-fuel credit for E85-capable vehicles was extended for several years and expanded to include bio-diesel.

Most importantly, the distinction between cars and light trucks will be maintained, with separate standards for each. NHTSA will be responsible for coordinating the two standards to ensure that the combined average fuel economy reaches 35 miles per gallon in 2020. In addition, an automaker can use credits for exceeding the target in one fleet to make up a shortfall in the other fleet. Effectively this makes the new CAFE a two-function-one-standard system. The ability to transfer credits from one fleet to the other gives automakers greater flexibility than they have under the old CAFE system.

Under the old system, NHTSA set the standard for light trucks but not cars, and also had the authority to determine which new vehicle models were light trucks. Not quite like the fox getting to decide which hens share the henhouse with the fox-friendly door, but close. The new system, by giving NHTSA authority over both cars and light trucks, reduces the temptation for NHTSA to continue to expand the definition of “light truck.” However, the automakers will continue to benefit from expanding the definition of “light truck,” so the expansion may be slowed but probably not stopped.

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  • Robert Stewart

    It actually made it the senate with the 15% mandate for power companies in tact. The senate believe they can work out some kinks to get it passed next week according to CNN. But it is looking like it will be vetoed by the evil Bush admin. Guess we’ll have to wait for the next president. At least there is some progress.

  • boo

    What ever happen to the 100mpg carb?

  • Nate

    That is way too late. We’ve already got cars that get better than that. I’m glad to see what this is doing for flex fuel vehicles. But the rest is worthless.
    I’d like to see flex fuel capability a requirement for anything that gets less than 25mpg.

  • Jerry

    The ability to transfer credits from one fleet to the other gives automakers greater flexibility than they have under the old CAFE system.

    !!!They literally drove a truck through the last legislation how much more lee way do they want!!

  • CLD

    Does anyone know what testing methodology will be used to determine CAFE under the new legislation (provided, of course, that the bill makes it to law)? Will it be the original 1975 method or the new 5-cycle method?

  • Andy

    Is is an ominous foreshadow that CAFE will be regulated by a safety agency (NHTSA), while the EPA responsible for protecting the environment is reduced to “providing input”. From what I’ve heard in the past, the NHTSA is pretty much run by the auto industry anyway.

    Efficiency in vehicles will follow the money.

  • Collin

    If the same President that announced (what we already knew) that “America is addicted to Oil”, Veto’s this bill…

    Definition of IDIOT!!!

  • RGD

    Will the Senate and the President have the guts to give the future generations a chance to breath instead of sucumbing to immediate greed.

  • JW

    We need to become green and help the environment.