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Auto Manufacturers, Groups Support New Fuel Efficiency Standard

President Obama signed an agreement Friday with thirteen major automakers to pursue the next phase in the Administration’s national vehicle program, increasing fuel economy to 54.5 miles per gallon for cars and light-duty trucks by Model Year 2025.

The President was joined by Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo – which together account for more than 90% of all vehicles sold in the United States – as well as the United Auto Workers (UAW), and the State of California.

The standards will require performance equivalent to 54.5 mpg or 163 grams/ mile of CO2 for cars and light-duty trucks by Model Year 2025, and are estimated to save $1.7 trillion dollars in fuel costs.

By 2025, this totals result in an average fuel savings of over $8,000 per vehicle. Additionally, these programs will save a total of 12 billion barrels of oil, and by 2025 reduce oil consumption by 2.2 million barrels a day – as much as half of the oil we import from OPEC every day, the White House said.

The standards also curb carbon pollution, cutting more than 6 billion metric tons of greenhouse gas over the life of the program – more than the amount of carbon dioxide emitted by the United States last year, the White House said.

Auto manufacturers, including the Association of Global Automakers (Global Automakers) and its member companies voiced support this next phase of fuel economy standards, with most indicating that the standards are a difficult but worthy challenge.

“These standards will be tough to meet but our members accept the challenge,” said Global Automakers’ President and CEO Michael J. Stanton. “We are fortunate to have a national plan that includes a midterm review and we look forward to working alongside the EPA, DOT and CARB on ironing out the details as the proposal moves through the federal regulatory process.”

Chrysler Group echoed support for “a single, national, and coordinated program that will reduce greenhouse gas emissions, and enhance our country’s energy security,” the company said, indicating that the national standard allows a greater opportunity to invest in the development of more fuel-efficient technologies. As well, Nissan and KIA issued a statement supporting a single policy line.

Environmental groups also praised the ruling – with few caveats. The Alliance to Save Energy group president Kateri Callahan, while speaking favorably of the historic agreement, pointed out, “the woefully out-of-date testing procedures currently used to measure a vehicle’s fuel economy.”

The test procedures used for fuel economy standards date from the mid-1970s, when air conditioning was not standard and the national speed limit was 55 miles an hour. In addition, the testing does not take into account technological changes in vehicles over the last 35 years, the group said.

The Environmental Defense Fund (EDF) was quick to point out that the technology to achieve these standards already exists, and that the manufacturers should not encounter any speed bumps. “If U.S. automakers achieve 54.5 miles per gallon, it will vastly improve our national future on many levels. And they certainly should succeed; we have the technology to reach that goal, and even to surpass it,” said EDF President Fred Krupp. “The smartest automakers should view the new standard as a floor, not a ceiling.”

Public opinion is also firmly behind the rigorous standard, according to an early July poll from the Pew Clean Energy Program. The survey found 82 percent of national voters support an increased fuel efficiency standard of 56 miles per gallon (mpg) by 2025, with 68 percent who “favor strongly.”

Overwhelming majorities in every demographic subgroup support increased fuel efficiency to 56 mpg, including 70 percent of Republicans, 87 percent of Democrats and 88 percent of independents, the survey found.

Meanwhile, according to Forbes, adding higher-tech components to achieve the standards is likely to account for new car prices to rise an average of 1.8 percent per year. At worst, the rise in new car prices could nullify drivers’ savings at the gas pump.

Among the groups that see the new mandate as a business opportunity is the Diesel Technology Forum, who issued a statement saying that the rule is expected to expand the opportunity for more clean diesel cars, light trucks and SUVs in the U.S. as the American consumer eases into the process of accepting plug-in electric, natural gas, or propane powered vehicles on a larger scale.

Photo: Pew Environment Group

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