July 30, 2011 in Business

Mileage standards hailed as blow to foreign oil dependency

Dina Cappiello And Tom Krisher Associated Press
Associated Press photo

President Barack Obama greets Ford President and CEO Alan Mulally, center, at the Washington Convention Center on Friday, where he announced new fuel efficiency standards.
(Full-size photo)

What new mileage standards do

• Double overall fuel economy to 54.5 mpg by 2025.

• Reduce U.S. oil consumption from vehicles by 40 percent.

• Save $8,000 in fuel costs over the life of a vehicle purchased in 2025, compared to a 2010 model.

Source: The White House

WASHINGTON – President Barack Obama and automakers ushered in the largest cut in fuel consumption since the 1970s on Friday with a deal that will save drivers money at the pump and dramatically cut heat-trapping gases coming from tailpipes.

The agreement pledges to double overall fuel economy to 54.5 mpg by 2025, bringing even greater under-the-hood changes to the nation’s autos starting in model year 2017, and introduce more electric and hybrid technology to pickup trucks. Cars and trucks on the road today average 27 mpg.

“This agreement on fuel standards represents the single most important step we have taken as a nation to reduce our dependence on foreign oil,” Obama said, sharing the stage with top executives of 11 major automakers and a top automobile workers union official.

When achieved, the 54.5 mpg target will reduce U.S. oil consumption from vehicles by 40 percent and halve the amount of greenhouse gas pollution coming out of tailpipes. It builds on a 2009 deal between the Obama administration and automakers, which committed cars and trucks to averaging 35.5 mpg by model year 2016.

For American families, the president said, the agreement means filling up the car every two weeks instead of every week. The changes also are likely to push up the cost of a new vehicle, but just how much is unclear because the regulation still has to be written. That process will get started in September.

The mileage target announced Friday isn’t exactly what consumers will see in their future cars. A formula that gives credits to manufacturers for electric cars, the use of low-emission air conditioning refrigerant and technology that shuts down engines at traffic lights means the actual fuel economy is likely to come in closer to about 40 mpg. Stickers on future cars and trucks will also display different numbers because they’ll be based on real-world mileage tests.

The deal was less than what environmentalists and public health advocates wanted but more than desired by the Detroit Three – General Motors, Ford and Chrysler.

For Obama, the compromise provides a way around political roadblocks and a down payment on climate change.

The deal also provides an answer to critics who say the president has not done enough to address high gasoline prices.

And at a time when a consensus in Congress is elusive on the debt ceiling and curbing the federal deficit, the president said the fuel economy deal was a “valuable lesson to” Washington.

“You are all demonstrating what can happen when people put aside differences,” Obama said. “These folks are competitors, you’ve got labor and business. But they said we are going to work together to achieve something important and lasting for the country.”

By the time the new standards take effect, the government expects gas-electric hybrids to make up about half the lineup of new vehicles, with electric vehicles making up about 10 percent of the fleet.

Currently hybrid and electric vehicles combined amount to less than 3 percent of U.S. vehicle sales, according to J.D. Power and Associates.

© Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

There are four comments on this story. Click here to view comments >>

Get stories like this in a free daily email