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Fuel Economy Standards
Los Angeles Times, January 26, 2009

Obama directs EPA to reconsider Bush-era auto emission policy
With the announcement, the president hands California a victory in its quest to set tougher limits on tailpipe emissions. He calls for stricter auto fuel-efficiency guidelines for model year 2011.

By Ken Bensinger and Jim Tankersley

Reporting from Washington and Los Angeles -- President Obama today directed the Environmental Protection Agency to reconsider a Bush-era decision that stopped California and at least 17 other states from setting their own, stricter limits on auto emissions.

At a morning news conference in Washington, Obama also directed his administration to move forward on tougher fuel-efficiency guidelines for the auto industry in time to cover 2011 model-year cars.

"For the sake of our security, our economy and our planet, we must have the courage and commitment to change," Obama said in the East Room of the White House. "It will be the policy of my administration to reverse our dependence on foreign oil while building a new energy economy that will create millions of jobs."

Today's actions come as Obama seeks to fulfill campaign promises in the first days of his administration. The moves fulfill long-held goals of the environmental movement.

California Gov. Arnold Schwarzenegger called the actions historic. California has the most aggressive policies, though other states plan to follow California's lead.

"Allowing California and other states to aggressively reduce their own harmful vehicle tailpipe emissions would be a historic win for clean air and for millions of Americans who want more fuel-efficient, environmentally friendly cars," said Schwarzenegger in an e-mailed statement.

"This should prompt cheers from California to Maine," said Frank O'Donnell, president of Clean Air Watch, speaking before today's formal announcement. He praised Obama as "a man of his word" for the decision.

Tim Carmichael, senior policy director at the Coalition for Clean Air, hailed the decision as a vital step for the administration and the world in the fight against global warming.

Passenger vehicles are estimated to emit 25% of the greenhouse gas emissions in the United States.

"I think Obama got a clear message that this is a priority not only for California state protection but also for planetary protection," Carmichael said.

A waiver would be a bitter defeat for the auto industry, which had for years hotly contested the implementation of the California rules and had applauded the Bush administration decision in December 2007 to deny a state waiver for California.

A spokesman for the Alliance of Automobile Manufacturers said Sunday that the industry group did not have a comment on the matter. Mike Moran, a spokesman for Ford Motor Co., said the company would not release a statement until Obama made a formal announcement.

At least 17 other states have adopted or are considering California's rules, and a waiver also would allow them to regulate tailpipe emissions. Altogether, those states, which include New York and Florida, represent about 40% of the population, according to auto industry estimates.

That has provoked considerable anxiety among carmakers. They could be forced to spend billions of dollars to comply with the California emissions rules, which are distinct from -- and more rigorous than -- federal fuel standards passed in 2007.

The federal standards would raise the national fleet average to 35 miles per gallon by 2020.

Bush's waiver denial provoked Schwarzenegger to sue the federal government. Last week, Schwarzenegger sent a letter to President Obama asking that the agency reconsider the matter. "Your administration has a unique opportunity to . . . move America toward global leadership on addressing climate change," the letter said.

Also last week, Mary Nichols, chairwoman of California's Air Resources Board, asked the EPA to open a "reconsideration process" in a letter she sent to Lisa Jackson, that agency's new administrator.

In December, Nichols indicated that the state board had been in close contact with Obama's transition team to help plan a way to pass the waiver and adopt specific rules on rolling out the regulation.

Earlier this month, Jackson pledged to reconsider the request -- and hinted that she supported granting it -- during a Senate hearing into her nomination.

After Obama turns the matter over to the EPA, the agency is expected to take several months to reach a final decision on whether to reverse the Bush denial.

News of Obama's expected statement won quick praise from Sen. Barbara Boxer (D-Calif.), who said it was "more than welcome news."

As chairwoman of the Environment and Public Works Committee, she said, she plans to work with the EPA to move a waiver through quickly.

"An immediate EPA review of the waiver decision shows respect for California" and the other states, Boxer said, while they wait for the "green light to address global warming pollution from motor vehicles."

In 2002, California passed a law to reduce greenhouse gas emissions for vehicles, but couldn't enforce it, as a series of lawsuits filed by the auto industry held it up.

Last year, judges handed down several rulings that would allow the rule's adoption, but an EPA waiver was still required.

The California rules don't strictly limit mileage. But by setting caps on carbon emissions, they would effectively require vehicles to reach as much as 42 mpg by 2020, according to some estimates. Currently, only two mass-produced vehicles, the Toyota Prius and the hybrid Honda Civic, average at least 42 mpg.

To reach that level on a fleetwide basis, automakers would likely have to invest in costly new technologies such as hybrid drive trains. Industry estimates put the per-vehicle cost of compliance as high as $5,000.

The Bush administration had been charged with developing final rules for the new federal mileage requirements, but elected to pass that task on to Obama, citing the auto industry's deep economic woes. Those rules must be published by April.

In taking up the tailpipe emissions issue after less than a week in office, Obama is sending a signal about the importance his administration places on environmental matters, environmentalists said.

There had been some expectation among them that Obama would instruct the EPA to grant the California waiver immediately, using the existing regulations.

But by sending the matter back to Jackson, Obama also indicates that he is aware of the auto industry's difficulties and willing to develop rules that would accommodate some of its immediate concerns.

Last month, the Bush administration agreed to give General Motors Corp. and Chrysler $17.4 billion in emergency loans.

The two automakers, which suffered the worst sales declines in a quarter-century last year, have until Feb. 17 to submit restructuring plans to the federal government, which will evaluate those plans by the end of March.

In addition to technological concerns, automakers worry that having the California rules in place would create regulatory chaos, with two separate rules on the books. They have argued that if government is going to regulate carbon emissions, as is the case in Europe, there should be one national rule.

That's a position echoed by environmentalists, who believe that California's regulations would open the door for serious discussion for a new countrywide standard.

"It's not going to happen overnight," said Spencer Quong, a senior analyst at the Union of Concerned Scientists. "This is a huge notice that the administration is going to deliver on its promise to clean up the environment and fight global warming."

Copyright 2009 Los Angeles Times

Photo © Paul S. Hamilton