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August 28, 2012

Obama Finalizes 54.5 MPG Fuel Efficiency Standards



In a move geared to generate lots of media mileage for the Democratic incumbent during the week of the Republican National Convention, U.S. President Barack Obama finalized groundbreaking standards for  fuel economy on August 28—increasing the requirements for cars and light-duty trucks to the equivalent of 54.5 miles per gallon (mpg) by model year (MY) 2025.

When combined with previous standards set by this Administration, this move will nearly double the fuel efficiency of those vehicles, compared to new vehicles currently on our roads. In total, the Obama Administration’s national program to improve fuel economy and reduce greenhouse gas emissions will save consumers more than $1.7 trillion at the gas pump and reduce U.S. oil consumption by 12 billion barrels.

“These fuel standards represent the single most important step we’ve ever taken to reduce our dependence on foreign oil,” said President Barack Obama. “This historic agreement builds on the progress we’ve already made to save families money at the pump and cut our oil consumption. By the middle of the next decade our cars will get nearly 55 miles per gallon—almost double what they get today. It’ll strengthen our nation’s energy security, it’s good for middle class families and it will help create an economy built to last.”

The standards—issued by the U.S. Department of Transportation (DOT) and the U.S. Environmental Protection Agency (EPA) —build on the success of the Administration’s standards for cars and light trucks for MY2011 through MY2016. Those standards, which raised average fuel efficiency to the equivalent of 35.5 MPG, already are saving Americans money at the pump.

A statement from the White House noted that achieving the new fuel efficiency standards “will encourage innovation and investment in advanced technologies that increase our economic competitiveness and support high-quality domestic jobs in the auto industry.”

The final standards were developed by DOT’s National Highway Traffic Safety Administration (NHTSA) and EPA following extensive engagement with automakers, the United Auto Workers union, consumer groups, environmental and energy experts, the State of California, and other key stakeholders, as well as the public.

Last year, 13 major automakers, which together account for more than 90 percent of all vehicles sold in the United States, gave their support to the new standards. President Obama announced the proposed standard in July 2011, joined by Ford, GM, Chrysler, BMW, Honda (News - Alert), Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota, and Volvo.

“Simply put, this [pace-setting] program will result in vehicles that use less gas, travel farther, and provide more efficiency for consumers than ever before—all while protecting the air we breathe and giving automakers the regulatory certainty to build the cars of the future here in America,” said Transportation Secretary Ray LaHood. “Today, automakers are seeing their more fuel-efficient vehicles climb in sales, while families already saving money under the Administration’s first fuel economy efforts will save even more in the future, making this announcement a victory for everyone.”

“The fuel efficiency standards … are another example of how we protect the environment and strengthen the economy at the same time,” said EPA Administrator Lisa P. Jackson. “Innovation and economic growth are already reinvigorating the auto industry and the thousands of businesses that supply automakers, as they create and produce the efficient vehicles of tomorrow. Clean, efficient vehicles are also cutting pollution and saving drivers money at the pump.”

Together, the Administration’s combined fuel efficiency initiatives will save American families more than $8,000 in fuel costs by 2025 over the lifetime of a vehicle.

For families purchasing a MY2025 vehicle, the net savings will be comparable to reducing the price of gas at the pump by approximately $1 per gallon. “Additionally,” said the White House, “these programs will dramatically reduce our reliance on foreign oil, saving a total of 12 billion barrels of oil and reducing oil consumption by more than two million barrels a day by 2025— as much as half of the oil we import from OPEC each day.”

The standards also represent historic progress to reduce carbon pollution and address climate change. Combined, the Administration’s standards will cut greenhouse gas emissions from cars and light trucks in half by 2025, reducing emissions by 6 billion metric tons over the life of the program – more than the total amount of carbon dioxide emitted by the United States in 2010.

In achieving these new standards, EPA and NHTSA expect automakers’ to use a range of efficient and advanced technologies to transform the vehicle fleet. The standards issued today provide for a mid-term evaluation to allow the agencies to review their effectiveness and make any needed adjustments.

Major auto manufacturers already are developing advanced technologies that can significantly reduce fuel use and greenhouse gas emissions beyond the existing MY2016 standards. In addition, a wide range of technologies are currently available to help automakers meet the new standards, including advanced gasoline engines and transmissions, vehicle weight reduction, lower tire rolling resistance, improvements in aerodynamics, diesel engines, more efficient accessories, and improvements in air conditioning systems.

The program also includes targeted incentives to encourage early adoption and introduction into the marketplace of advanced technologies to dramatically improve vehicle performance, including:

  • Incentives for electric vehicles, plug-in hybrid electric vehicles, and fuel cells vehicles 
  • Incentives for hybrid technologies for large pickups and for other technologies that achieve high fuel economy levels on large pickups
  • Incentives for natural gas vehicles 
  • Credits for technologies with potential to achieve real-world greenhouse gas reductions and fuel economy improvements that are not captured by the standards test procedures.

“These essential standards will reduce oil use, save families money from lower gasoline purchases, create jobs, and reduce emissions responsible for climate change,” stated the Washington, DC-based Center for American Progress, an independent nonpartisan group  “dedicated to improving the lives of Americans through progressive ideas and action.”

In addition, the United Auto Workers (UAW) released a statement: “The UAW congratulates the Obama administration, the Department of Transportation and the Environmental Protection Agency on the publication of the final rules regulating Corporate Average Fuel Economy (CAFE) and Greenhouse Gas Emissions for light-duty vehicles, model years 2012 – 2017. The final rules have the full support of the UAW. “ 

UAW President Bob King said, “These new standards will help propel the auto industry forward by giving American families long-term relief from volatile fuel prices. Lowering the total cost of driving will make automobiles more affordable and expand the market for new vehicles.”

He added, “The standards will also provide certainty for manufacturers in planning their investments and creating jobs in the auto industry as they add more fuel-saving technology to their vehicles.  Bringing this additional content to market requires more engineers and more factory workers, expanding employment in the industry,” King added.

A 2012 study by the BlueGreen Alliance, “Gearing Up,” found that the standards will lead to the creation of 570,000 new jobs by 2030, largely because consumers will spend less on fuel and more on other goods and services.

“This new standard caps off a remarkable set of achievements by President Obama to save the domestic auto industry and put it on a path to long-term prosperity,” said King. “Cleaner vehicles that significantly reduce our nation’s oil consumption are good for the auto industry and its workers, good for the environment and good for our nation’s economy.”

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Edited by Brooke Neuman

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