January 2008

Congress has 30-year itch to raise fuel standards

It is about time to scratch.

Automakers, flex-fuel advocates, and global warming devotees are following the negotiations and machinations in Washington, D.C., as a deal nears to raise U.S. fuel economy standards.

Manufacturing, engineering, and automation will see significant process changes and opportunities should the present bill that would raise the fleet-wide standard to 35 miles per gallon by 2020 pass.

Congress is finalizing a deal that would raise the fuel economy standards for most U.S. cars and trucks for the first time in more than 30 years.

CNN reported automakers hope all-electric cars like the Chevy Volt will raise fleet-wide fuel standards.

However, the bill also contains several significant loopholes that would allow auto companies to get around the new limits.

The centerpiece of the bill is a requirement that would raise the corporate average-fuel-economy standard (CAFE) from 27.5 miles per gallon for cars and 22.2 mpg for trucks to 35 mpg fleet-wide by 2020.

The Senate passed the mandate in June, but the House has not yet voted (at the time of print for this publication). 

Large "work trucks" like the Dodge Ram 3500, the Ford F-350, and the Chevrolet Silverado 3500 would be exempt from the new 35 mpg standard.

Automakers will get credits to count against their fleet-wide average for selling "flex fuel" cars that are able to use alternative fuels or gasoline. 

Although U.S. manufacturers have built millions of flex fuel cars, ethanol actually runs in only about 1.5% of them declared the Union of Concerned Scientists. Most continue to run on gasoline. 

Ethanol is not widely available to car owners.

Rep. Ed Markey, D-Massachusetts, chairman of the House Select Committee on Global Warming, said, "The higher standard will be a huge victory. It won't be something, however, that will stop us in the years ahead continuing to look at ways to continue upon that further."

House Energy and Commerce Chairman John Dingell, D-Michigan, who has been a key negotiator on the compromise bill and defender of auto industry interests wants to include a provision that would build in job protections for U.S. autoworkers, requiring U.S. auto companies to continue to manufacture a certain percentage of their vehicles in the U.S.

The bill will also include a requirement to increase the production of biofuels like ethanol to 36 billion gallons by 2022. 

According to the Department of Energy, the U.S. produced 4 billion gallons of biofuels in 2005.