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Proposal curbs car emissions

Tue., May 19, 2009, midnight

Plan also raises mileage standards

WASHINGTON – The Obama administration plans today to propose tough standards for tailpipe emissions from new automobiles, establishing the first nationwide regulation for greenhouse gases.

It will also raise fuel efficiency targets to 35.5 miles per gallon for new passenger vehicles and light trucks by 2016, four years earlier than required under the 2007 energy bill, sources close to the administration said.

The measures are significant steps forward for the administration’s energy agenda by cutting greenhouse-gas emissions that contribute to climate change and by easing U.S. dependence on oil, most of which is imported.

The administration is embracing standards stringent enough to satisfy the state of California, which has been fighting for a waiver from federal law so that it could set its own guidelines, sources said. Govs. Arnold Schwarzenegger, R-Calif., and Jennifer Granholm, D-Mich., will be among state and industry officials who plan to attend an announcement today, according to sources close to the administration.

The deal has been under negotiation since the early days of the administration. It represents a compromise among the White House, the state of California and the automobile industry, which has long sought national mileage standards and has waged an expensive legal battle against the California waiver. The industry will get its national standard, but one that approximates California’s targets. Industry officials said they would drop all related lawsuits.

David McCurdy, president of the Alliance of Automobile Manufacturers, said that the agreement reached late Sunday would provide the industry with “clarity and predictability.”

That predictability won’t come cheap. A senior administration official said the new standards would increase the cost of an average car by $1,300, $600 of which is attributed to the new rules. The remaining increase would have come about as a result of previous energy policy.

“Consumers can retain choice but for more fuel-efficient cars. Every single category of car will be more efficient,” the official said, noting that fuel savings would offset much of the higher cost.

The announcement planned today marks a major change in tone from that of the Bush administration, which had rejected California’s waiver in March 2008, barring states from setting their own limits on greenhouse gas emissions from automobiles. At the time, 13 other states and the District of Columbia were also seeking permission to impose standards similar to California’s.

Obama had ordered the EPA to reconsider the ruling.

Under the compromise, the federal government will establish two sets of standards, one for mileage and one for tailpipe emissions of carbon dioxide.

The Transportation Department’s National Highway Traffic Safety Administration will set the new fuel economy standards. Cars, for instance, would need to average 39 miles per gallon by 2016 while light trucks would need to reach 30.

The Environmental Protection Agency, using its power to regulate carbon dioxide emissions under a 2007 Supreme Court ruling, plans a tailpipe emissions standard of 250 grams per mile for vehicles sold in 2016, roughly the equivalent of what would be emitted by vehicles meeting the mileage standard. Vehicles sold in 2009 are expected to emit about 380 grams per mile, industry sources said. The EPA needs to go through a rulemaking process to allow responses before the standards would go into effect.

One person involved in the negotiations said the Supreme Court’s ruling on regulating emissions helped push companies to bargain because they feared the prospect of having to comply with separate EPA standards in addition to those from the NHTSA and California.

In addition, many of the automakers that originally fought California’s standards are now struggling for financial survival and in a weaker position to fight. Their opposition also waned after last year’s high gasoline prices and consumers’ newfound frugality shifted the mix of vehicles being sold toward more fuel-efficient vehicles. General Motors said Monday that in 2008, the average fuel efficiency of its cars was 29.7 miles a gallon, higher than the 27.5 requirement; its new trucks sold got 23.2 miles a gallon, somewhat higher than the 22.6 miles a gallon requirement for last year.

“We are pleased that President Obama is taking decisive and positive action as we work together toward one national standard for vehicle fuel economy and greenhouse gas emissions that will be good for the environment and the economy,” Ford Motor Co. said in a statement.

The EPA is also expected to impose restrictions on greenhouse gas emissions resulting from leaks of air conditioning coolant in vehicles. The automakers would be able to use some credits for complying with those regulations to offset a small part of fuel efficiency requirements, sources familiar with the talks said.

California made modest concessions in the negotiations. Between 2012 and 2015, the new mileage standards will be slightly less stringent than required under California’s rules, which will be amended. In addition, both federal agencies will use the federal approach of pegging standards to the “attributes” of vehicles, such as size and engine type, said sources familiar with negotiations over the deal.

California, by contrast, used just two broad categories of vehicles.

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