Obama Fuel Ruling Headed For Compromise

February 3, 2009

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President Obama’s order to the Environmental Protection Agency to reconsider its earlier ban on Californian tough greenhouse gas emissions is likely to end in a compromise that automakers and environmentalists can live with, writes Freep.com.

California standard calls for a carbon dioxide emissions reduction of 30 percent by 2016. As lower CO₂ emissions are directly proportional to reduced consumption of gasoline, the rule requires an average fuel economy of 26.7 m.p.g. for pickups and SUVs and 43.2 mpg for cars.

The only car currently sold in the U.S. that would meet the standard is the Toyota Prius hybrid, and among hybrids SUVs, only the Ford Escape and Mercury Mariner would pass.

Though it looks like the automakers will have to play by the same rules, they don’t. Only those that sell 60,000 a year or more vehicles in California have to meet that toughest standard, while those that sell fewer cars (new brands from China and India) get a pass.

Automakers that sell fewer than 4,000 vehicles a year in California never have to hit 43.2 mpg, and those that sell fewer than 60,000 get years longer to meet that standard.

Large automakers say the only way they can hit those targets that soon is by greatly limiting the sales of their most popular vehicles in California. In an attempt to prevent people from driving to the next state to buy their cars, California ruled that no resident can bring a new car with fewer than 7,500 miles on it into the state. The rule was considered unfair and unworkable, but it effectively blocked negotiations between automakers and environmentalists.

Obama’s ruling will force both sides to compromise; regulators must come up with a plan that their citizens will tolerate, and automakers will have to make serious concessions to new fuel efficiency and environmental standards.

Governor Arnold Schwarzenegger and governors from neighboring states will welcome the ruling as a vindication; they had vowed to fight the EPA’s overruling in December 2007.

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