Senate panel OKs 40% boost in fuel economy

updated 2:33 p.m. ET May 8, 2007

WASHINGTON - A Senate committee approved a plan Tuesday to increase fuel efficiency standards to an average of 35 miles per gallon by 2020 in a move closely watched by automakers and environmental groups.

The Senate Commerce, Science and Transportation Committee passed the measure on a voice vote. It would raise the nationwide fleet fuel economy average by about 40 percent compared with the current levels of 25 mpg and increase standards by 4 percent a year from 2020 through 2030.

“This is not a perfect bill, but I think we have reached a stage where most parties would say this is fair,” said Sen. Daniel Inouye, D-Hawaii, the committee’s chairman.

He said the bill would be considered before the full Senate in June.

Lawmakers took their first step in demanding more efficient vehicles from automakers amid concerns about global warming and the nation’s dependency on imported oil. Gasoline prices have surged in recent weeks to a record nationwide average of $3.07 a gallon, or nearly 20 cents higher than two weeks earlier, according to the Lundberg Survey.

“Saturday night my husband and I were in San Francisco and we paused at a gas station and we literally couldn’t believe our eyes — $4.24 a gallon,” said Sen. Barbara Boxer, D-Calif. “And each type of gasoline ... over $4. Just to look at that was a shock to our eyes.”

Sen. Ted Stevens, R-Alaska, the committee’s ranking member, and Trent Lott, R-Miss., said they had concerns about how the bill might affect trucks and its fairness toward some auto manufacturers.

The committee also approved a proposal by Sen. Maria Cantwell, D-Wash., to create federal criminal penalties for price gouging at the fuel pump if the president declares an emergency because of high energy prices.

Republicans opposed the plan, which was approved on a voice vote, because they said it included an arbitrary definition of price gouging. Sen. Jim DeMint, R-S.C., said it “creates a new playground for the lawyers.”

Under the bill, medium-duty and heavy-duty trucks, including school buses, large trucks used in construction and tractor trailers, would have to meet fuel economy requirements for the first time. But it was unclear when they would need to meet new standards because the bill first would require study by the National Academy of Sciences.

Domestic automakers and the United Auto Workers have said the proposal would be unattainable and threaten jobs at a time when General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group have already announced thousands of job cuts.

Alan Reuther, the UAW’s legislative director, wrote that the proposal would force manufacturers “to close more facilities, destroying tens of thousands of additional jobs and undermining the economic base of communities across this country.”

Environmentalists said they were concerned that the proposal was weaker than one offered by President Bush, which would set a goal of a 4 percent annual increase while increasing use of alternative fuels.

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