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Obama administration unveils fuel economy rules

Wednesday, September 16, 2009

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With global talks on climate change looming, the Obama administration sought to gain momentum Tuesday by unveiling its plan to require better gas mileage for cars and trucks and the first-ever rules on vehicle greenhouse gas emissions.

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Transportation Secretary Ray LaHood and EPA Administrator Lisa Jackson released the proposed regulations at the White House, the follow-up to President Barack Obama's announcement in May that the government regulations would link emissions and fuel economy standards.

"This action will give our auto companies some long-overdue clarity, stability and predictability," Obama said Tuesday during a visit to a General Motors plant in Lordstown, Ohio.

"This marks a significant advance in our work to protect health and the environment and move our nation to a sustainable economy in the future," Jackson said.

The new standards call for the auto industry's fleet of new vehicles to average 35.5 miles per gallon by 2016.

The proposal will cover vehicle model years 2012 through 2016, allowing auto companies to comply at once with all federal requirements as well as standards pushed by California and about a dozen other states.

The administration estimated the requirements would cost up to $1,300 per new vehicle by 2016 - but that it would take just three years to pay off that investment and that the standards would save more than $3,000 over the life of the vehicle through better gas mileage.

Jackson said the new standards will have the effect of taking 42 million cars off the road.

The proposal is expected to increase vehicle fuel efficiency by about 5 percent annually and reduce greenhouse gas emissions by nearly 950 million metric tons. The plan would also conserve 1.8 billion barrels of oil, Jackson said.

Administration officials noted that the new standards are four years ahead of a 2007 law that would have required the auto industry to meet a 35 mpg average in 2020.

The proposed rules are expected to provide automakers some flexibility in meeting the requirements in exchange for building advanced vehicles. Some luxury automakers and foreign manufacturers who sell a limited number of vehicles in the United States could meet a less-stringent standard in the early years of the regulations.

The agencies must finalize the proposal by March 30 to give automakers enough planning time for the regulations to take effect in the 2012 model year.

Tuesday's announcement could provide the Obama administration momentum on climate change in advance of a series of high-level talks on a new international agreement to curb heat-trapping gases and a speech by the President next week on global warming at a special U.N. summit.

The administration's lead climate negotiator just last week acknowledged that negotiations have so far failed to bridge the divide between developed and developing nations, saying that action on the part of the U.S. by passing legislation to limit greenhouse gases was urgently needed. But with the bill delayed in the Senate by the health care debate, the chances that Congress will act before more than 180 nations gather in Copenhagen, Denmark in early December to work on a new treaty are growing dimmer.

The new fuel economy standards, in the meantime, could serve as a placeholder - a concrete step that the Obama administration is taking to reduce greenhouse gas emissions.

In another prelude to Copenhagen, the Obama administration announced Tuesday that the U.S., Mexico and Canada would ask 195 nations that ratified a U.N. ozone treaty to enact mandatory reductions in hydrofluorocarbons, or HFCs, powerful greenhouse gases used as coolants in refrigerators and air conditioners.

The State Department said that the proposal, if adopted, represents "a significant down payment" on efforts to broker a new climate change agreement later this year and would help the U.S. achieve the president's goal of reducing greenhouse gases by 80 percent come 2050.

Hydrofluorocarbons account for only about 2 percent of the globe's climate-warming gases, but their share is expected to grow to up to a third of all greenhouse gases by mid-century. That's because the 21-year-old ozone treaty, known as the Montreal Protocol, promoted their use to replace chlorofluorocarbons, which harm the ozone layer.

LaHood, meanwhile, said the administration had paid out $2.5 billion at this point for the Cash-for-Clunkers program under which auto dealers sold more than 700,000 vehicles in 30 days. LaHood said the remainder of federal payments to dealers under the program would be paid by the end of the month, taking government payments to a total of $3 billion.

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Associated Press writer Dina Cappiello contributed to this report.

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