Senate Panel Slams Bush Fuel Economy Plan

By J.R. Pegg

WASHINGTON, DC, March 7, 2007 (ENS) - The Bush administration's plan to revise fuel economy standards appears to have stalled on Capitol Hill, with both Democrats and Republicans criticizing the proposal as timid and inadequate. The White House wants authority to set new standards for passenger cars, but members of a key Senate panel on Tuesday argued a specific mandated increase in fuel economy is needed to reduce oil consumption and address global warming.

"I sense a great deal of footdragging, reluctance and frankly bureaucratic obstacles to this process," said Senator Olympia Snowe, a Maine Republican, during a Senate Commerce Committee hearing on the issue. "We should be rising to the occasion and that is frankly not happening."

Raising the fuel economy standards for passenger cars is part of President Bush's 20 in 10 plan, which aims to reduce gasoline consumption 20 percent by 2017.

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Maine Republic Senator Olympia Snowe said the Bush plan fails to show the urgency needed.(Photo courtesy Sen. Snowe's office)

The proposal requires Congress give the National Highway Traffic Safety Administration (NHTSA) new authority to modify the Corporate Average Fuel Economy (CAFE) program so the administration can create different standards based on vehicle size and consider other factors, such as economics impacts and technological advances.

The administration used a similar system for its recent revision to standards for light trucks.

With the new authority, the administration says it envisions a 4 percent annual increase in CAFE standards for passenger cars beginning in model year 2010 and for heavy trucks in 2012.

"Our overall goal is to get as much fuel savings as possible from the program," NHTSA Administrator Nicole Nason told the committee.

Currently automakers must meet a fleetwide CAFE standard of 27.5 miles per gallon (mpg) - a standard that has been in place for more than 20 years.

Nason said reform is needed because the program encourages automakers to make smaller cars, rather than creating incentives for increased fuel economy for every size of vehicle.

"Given NHTSA's recent experience with setting the fuel economy standard for light trucks, which comprise half the vehicles sold today, we believe we have demonstrated our capability to set balanced standards for passenger vehicles, given the authority for reform," she told the committee.

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NHTSA Administrator Nicole Nason, who took her post last year, faced hostile questioning at the hearing.(Photo courtesy NHTSA)

But senators contend the light truck standards demonstrate the administration's lack of urgency about the need to improve fuel economy.

Those standards boosted the fuel economy of light trucks from 22.2 mpg to 24 mpg within four years and will also bring large pickups and SUVs into the program by 2011.

Snowe called the increase "miniscule."

"We are just nibbling at the margins in the most timid and reluctant and ineffective way," added Senator John Kerry, a Massachusetts Democrat. "You guys just don't excite the marketplace, you're not willing to challenge it."

Several senators questioned why the administration is reluctant to embrace a specific goal for passenger cars

"This is one of the most serious issues we face in terms of the energy crisis," said Senator Ted Stevens, an Alaska Republican. "The goals ought to be very firm."

Stevens has introduced legislation to set a 40-mpg standard by 2017, a concept Nason said could force NHTSA to develop a standard that limits consumer choice and interferes with the business plans of automakers.

"It would be our preference to have the authority to reform the program over all," Nason said. "The problem that we have in doing a proposal is being hemmed in by specifics."

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The average fuel economy of the fleet of new cars and trucks sold in the U.S. in 2006 was lower than it was in 1986. (Photo courtesy EPA)

Senator Barbara Boxer, a California Democrat, blasted Nason's position and said the administration had little interest in honestly tackling the issue.

"For those who want to do nothing about fuel economy, you are the perfect spokesman," Boxer said, adding that the United States continues to cede leadership on the issue to other nations.

The Chinese government is developing much stricter standards, Boxer said, a move that could have economic ramifications for U.S. automakers.

"China, the worst leader on the environment ... may well say to American car companies 'gee if you don't modify, you won't be able to sell here,'" she said.

Boxer and others also criticized the administration for failing to consider the benefits of reducing greenhouse gas emissions through higher fuel economy - U.S. cars and trucks alone produce more greenhouse gas emissions than every nation bar China and Russia.

NHTSA calculated the amount of greenhouse gas emissions that would be reduced by the higher light truck standards, Nason said, but had difficulty "monetizing the benefit."

"There is such a disparity in the scientific community about how to value carbon dioxide," she said.

Snowe called the decision to choose a monetary benefit of zero "confounding."

"That is a fundamental benefit," Snowe said.