Industry battles state-by-state mpg

Harry Stoffer

Automotive News | February 2, 2009 – 12:01 am EST


Industry battles state-by-state mpg

Even new national rule on fuel economy could be tough


WASHINGTON — Automakers and their allies are gearing up for an intensive lobbying campaign to convince Washington that national standards for greenhouse gas emissions are better than state-by-state rules.

But if national standards are adopted, they are likely to require much tougher fuel economy mandates than the Transportation Department’s 35 mpg target.

Last week, President Barack Obama told federal regulators to set corporate average fuel economy standards only for 2011 model cars and trucks and to rethink requirements for 2012-15. That move, a senior industry lobbyist said, suggests that the president wants the EPA to develop its own national greenhouse gas rules. Those rules would accompany federal fuel economy standards set by the Transportation Department.

Obama also ordered the EPA to reconsider a proposed waiver for California to set its own limits on greenhouse gas emissions. California and at least 13 other states expect the waiver within months.

If the California rules became national standards, they would require vehicles to average about 34 mpg by 2016 and 42 mpg by 2020. Federal standards call for fuel economy of at least 35 mpg by 2020.

While the auto industry desires a single national standard — rather than a patchwork of state results — environmentalists seek tough national targets.

Any federal mandate on emissions will have to be at least as strong as California’s to satisfy state governments, environmental groups and their political allies, said Eli Hopson, clean-vehicles specialist at the Union of Concerned Scientists. Even then, he said, California should retain the power to set its own rules to prevent federal backsliding.

California everywhere

Industry leaders believe they can convince government that tough federal fuel economy standards would confer environmental benefits comparable to those provided by state greenhouse gas rules. But the industry effort is seriously hamstrung.

The Detroit 3 are in dire financial straits. General Motors and Chrysler LLC are getting $17.4 billion in federal loans — a tough position from which to challenge government.

Moreover, the auto industry’s chief congressional ally, Rep. John Dingell, D-Mich., has been deposed as chairman of the powerful House Energy and Commerce Committee.

To make things even more difficult, the Detroit 3 are getting uncertain support from other automakers. Import-brand automakers also oppose state-by-state rules. But members of the Association of International Automobile Manufacturers — which represents Toyota, Honda, Nissan and 11 other import-brand automakers — have struggled with consensus on fuel economy regulations.

Association President Mike Stanton called state by-state regulation "a huge burden and such a waste." But he conceded the difficulty of finding "one overall way to do it."

Meanwhile, auto dealers are fighting the proposal to let California regulate greenhouse gases, but dealers traditionally have more influence on Republican lawmakers than Democrats.

Dealers gird for fight

Obama is in the White House, and Democrats have expanded their majorities in the House and Senate and among state governors.

Dealers also worry that a state-by-state patchwork would create chaos in the marketplace, says David Regan, vice president of legislative affairs for the National Automobile Dealers Association.

NADA argues that dealerships in states with tough rules — such as California — would lose sales as customers migrate to nearby stores in unregulated states. Moreover, smaller automakers would have a big advantage over large automakers.

Through 2016, the California rules would apply only to automakers that sell at least 60,000 new vehicles a year in the state. If they were in force today, the rules would affect General Motors, Ford, Chrysler, Toyota, Honda and Nissan. That’s unfair, those companies say.

The main target of the rules is carbon dioxide, a byproduct of burning fuel. Higher concentrations are considered a main cause of global warming.

The difficulty in finding common ground on emissions emerged again last week. The nonprofit Aspen Institute revealed it had convened private talks among four automakers, three environmental groups and the California Air Resources Board.

The goal, the institute said, was to resolve conflicts between state greenhouse gas rules and federal fuel economy regulations. One industry official called the discussions "a start." But an environmental activist familiar with the talks said they had made no progress. 

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