New policy merges fuel efficiency, tailpipe limits

President Obama plans to announce Tuesday a new policy that for the first time merges fuel-efficiency standards for cars and trucks with limits on tailpipe pollutants, an effort to unify regulations that will greatly influence how the nations beleaguered automakers design future vehicles.

The new rules would reduce carbon-dioxide emissions by 900 million tons over five years, the equivalent of taking 177 million cars off the road or shutting down 194 coal plants, a senior administration official told reporters Monday night on the condition of anonymity.

White House officials said the new standards will bring together domestic automakers, and federal and state regulators - three groups that have often been divided on how to regulate emissions.

“For seven long years, there has been a debate over whether states or the federal government should regulate autos,” said Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers and a former Democratic congressman from Oklahoma. “President Obama’s announcement ends that old debate by starting a federal rulemaking [process] to set a national program.”

The new Corporate Average Fuel Economy (CAFE) standard would require that automakers’ fleets average 35.5 miles-per-gallon by 2016, four years earlier than Congress first mandated in 2007. By that date, the administration also will require tailpipe emissions to be reduced by 30 percent.

Automakers can meet the new fuel standards either by improving their vehicles’ mileage or by showing that their lessened tailpipe emissions achieve the same effect on oil consumption, said an industry official with knowledge of the talks with the administration.

Automakers have historically fought mileage and emission standards, arguing the technology is still being developed, too costly and that market forces should drive major changes.

The White House acknowledged that the new regulations would likely add about $600 to the cost of building each car, although the senior administration official said the gasoline savings would easily offset that.

But the playing field has changed dramatically recently, with Chrysler LLC in bankruptcy and both it and General Motors Corp. tapping federal money to keep afloat.

“I think there has been a crisis for quite some time in ensuring certainty for automakers,” White House press secretary Robert Gibbs said. “I think there’s been a crisis for quite some time in the emission of dangerous greenhouse gases. And I think there has been a crisis for quite some time in our dangerous dependence on foreign oil.”

A pending ruling from the Environmental Protection Agency (EPA) would allow California and 13 other states to set car-emission standards tougher than the federal government’s. The George W. Bush administration had denied the waiver, but the Obama administration is expected to approve it.

EPA Administrator Lisa P. Jackson began vetting the California request shortly after taking the reins of the agency, although the state has agreed not to impose its own standards beyond these federal proposals.

While Congress has determined national CAFE standards since they began in the 1970s, the new standard would not require congressional approval because it is coming as a joint rule from the EPA and the Department of Transportation, the administration official said.

The policy marrying the fuel and tailpipe standards was made possible by a 2007 Supreme Court decision ordering the EPA to determine whether carbon dioxide from car exhaust is a pollutant and a public-health threat. The EPA issued a draft finding to that effect last month, but has yet to issue rules to counter that threat by curbing carbon-dioxide emissions.

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