Legislation that will fundamentally change the cars Americans drive was signed by President Bush Wednesday after having been adopted by the House on Tuesday by a large margin. The bill, which passed on a bipartisan vote of 314 to 100, sets higher fuel economy standards for cars and light trucks by law for the first time in 32 years.

The new law raises the gasoline mileage requirements of cars and trucks by 40 percent to an average 35 miles per gallon by 2020, which will eventually reduce U.S. oil demand by 2 million barrels a day. The bill’s new requirements begin with the 2011 model year.

“Today, we make a major step with the Energy Independence and Security Act,” the president said after signing the bill at the Department of Energy. “We make a major step toward reducing our dependence on oil, confronting global climate change, expanding production of renewable fuels and giving future generations a nation that is stronger, cleaner and more secure."

Bush also praised a measure in the bill that will provide at least $90 million annually for battery research to make plug-in hybrids a reality.

Chrysler’s president, James E. Press, said he welcomed the new legislation. “Now we get some better clarity where the road goes and how steep the hill to climb is going to be, and we’re going to have fun,” said Mr. Press, formerly Toyota’s top executive for North America. General Motors Corp. Chairman Rick Wagoner said the standards “set a tough, national target that GM will strive to meet.”

Perhaps the biggest winners were companies like Archer- Daniels-Midland Co. and Pacific Ethanol Inc. in the ethanol industry. The legislation requires that biofuels be blended with gasoline to reduce the amount of petroleum needed for U.S. transportation. It boosts the requirement for production of biofuels to 36 billion gallons in 2022 from 7.5 billion in 2012.

The legislation was sent to the White House in a Toyota Prius, according to an e-mail from House Speaker Nancy Pelosi’s office. Pelosi, a California Democrat, said the law would save the average driver between $700 and $1,000 per year in gasoline costs.


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