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Fuel Economy Standards
MSNBC, May 19, 2009

Obama announces fuel standards
By Athena Jones

President Obama announced new national auto fuel-efficiency and emissions standards that he said would help reduce the country's dependence on foreign oil, cut pollution, and ultimately save people money.

Under the new rules -- which would replace a patchwork of different standards set by two government agencies and several states -- carmakers would have to produce vehicles with a fleet average of 35.5 miles per gallon by 2016, four years earlier than the CAFE law requires. The program begins in model year 2012, and would increase fuel efficiency by an average of 5% a year between 2012 and 2016.

The chief executives of 10 auto companies joined the president on stage for the announcement, along with EPA Administrator Lisa Jackson, Transportation Secretary Ray LaHood, and United Auto Workers President Ron Gettelfinger. Several of Obama's cabinet secretaries were also on hand for the event, along with House Speaker Nancy Pelosi and Govs. Jennifer Granholm (MI), Arnold Schwarzenegger (CA), and Deval Patrick (MA).

"For the first time in history, we have set in motion a national policy aimed at both increasing gas mileage and decreasing greenhouse gas pollution for all new trucks and cars sold in the United States of America," Obama told the crowd assembled in the Rose Garden.

"Everyone wins: Consumers pay less for fuel, which means less money going overseas and more money to save or spend here at home," he continued. "The economy as a whole runs more efficiently by using less oil and producing less pollution, and companies like those here today have new incentives to create the technologies and the jobs that will provide smarter ways to power our vehicles."

The administration estimates the new vehicles would cost consumers an extra $1,300, but says that increase will be offset by future savings on gasoline amounting to some $2,800 over the life of the vehicle. According to the fact sheet provided by the White House, the program was projected to reduce greenhouse gas emissions by 900 million metric tons.

Obama said that the new rules would save 1.8 billion barrels of oil over the life of the program. "Just to give you a sense of magnitude, that's more oil than we imported last year from Saudi Arabia, Venezuela, Libya, and Nigeria combined," he said.

As a candidate, Obama often spoke of the connection between oil and national security, saying it was important to reduce America's dependence on foreign oil, in large part because it resulted in the transfer of so much wealth to unfriendly governments.

The White House repeatedly stressed the fact that carmakers, unions, and governors were coming together to agree on an increase in standards -- something many companies have long fought because of cost concerns.

Among the CEOs present for the announcement were the heads of Chrysler and GM, both of which are receiving government aid. But White House Press Secretary Robert Gibbs pushed back at the suggestion that the aid forced the companies to agree to the new standards.

"You might have a point if they were the only two companies that were standing behind him, but Ford's not received any assistance," he told a reporter during the afternoon briefing. "If you think about the 10 companies that are represented here today, two right now are in the midst of temporary government assistance, but I think the notion that you have collectively -- an industry speaking with one voice -- and then this time speaking with a voice for reform, I think that's -- that honestly says all you need to hear."

© 2009 msnbc.com

Photo © Paul S. Hamilton