Senators reach agreement on fuel economy

updated 1:19 a.m. ET June 22, 2007

WASHINGTON - The Senate voted Thursday to require average fuel economy of 35 miles per gallon for new cars, pickup trucks and SUVs by 2020, raising efficiency standards that have not changed significantly for nearly two decades.

The fuel economy measure was added to a broad energy bill without a roll call vote even as senators were holding a news conference announcing the compromise.

Republicans earlier blocked Democratic efforts to raise oil taxes by $29 billion and use the money to promote renewable fuels and other clean energy programs.

Democratic leaders hoped to complete the energy bill Thursday night, but senators close to the auto industry began an effort to derail the entire bill.

“We will be continuing to oppose it,” said Sen. Carl Levin, D-Mich., “This is not over by any stretch.”

The legislation for the first time would establish a single fuel economy standard applicable to not only cars, but also SUVs and pickups which currently have to meet less stringent requirement.

Fuel efficiency requirements would vary for different classes of vehicles based on weight and size. But manufacturers would be required to meet an overall fleetwide average of 35 mpg.

“It closes the SUV loophole,” declared Sen. Dianne Feinstein, D-Calif., referring to current requirements that allow much less stringent fuel efficiency standards for SUVs and pickup trucks than for cars. “This is a victory for the American public.”

The compromise, approved without floor debate, was crafted over several days behind closed doors with the aim of heading off attempts by senators sympathetic to the auto industry to press a less stringent proposal.

President Bush, who was in Alabama visiting a nuclear power plant, said Congress must “be realistic” about the energy legislation. The White House opposes having Congress mandate a specific mileage number for auto fuel economy. Bush believes the Transportation Department should be given increased flexibility to set a standard.

Automakers are currently required to meet an average of 27.5 mpg for cars and 22.2 mpg for SUVs and small trucks. The car standard has not changed since 1989, though the truck requirements have been increased slightly by the Bush administration.

The measure tacked onto the energy bill would require a 35 mpg fleet average — including SUVs and pickup trucks — by 2020, and require that automakers make half of their vehicles capable of running on 85 percent ethanol fuel by 2015.

The compromise removed a requirement that automakers would have had to meet an additional 4 percent increase per year for 10 years after 2020. The ethanol flex-fuel requirement also would have been three years longer.

Automakers had strongly opposed the 4 percent requirement, saying it was not achievable and would have required them to make vehicles with a fleet-wide average of 52 mpg by 2030.

“This compromise is a significant step to keeping this legislation moving forward,” said Sen. Ted Stevens, R-Alaska.

Senate Majority Leader Harry Reid, D-Nev., said it was important that some version of the mileage increase be included in the broader energy bill, even if the requirements on automakers were eased a bit under the compromise.

Reid said he hoped to have the bill approved by the end of Friday.

The auto fuel economy issue has been one of the thorniest facing lawmakers.

Auto industry leaders came to Capitol Hill several weeks ago saying they could not meet the kind of fuel use increases being contemplated. Industry executives and car dealers visited Senate offices this week in last minute lobbying and urged senators to approve a less stringent measure.

The harsher version would have required cars to meet a 35 mpg standard, and SUVS and pickups 30 mpg by 2025.

The debate over auto fuel economy is far from over.

In the House, the issue is not resolved. A draft energy bill does not include provisions on auto fuel economy, although Rep. Edward Markey, D-Mass., is expected to try to add one when the legislation comes to the floor in coming weeks.

Rep. John Dingell, D-Mich., a longtime protector of auto industry interests, said his House Energy and Commerce Committee will not address the matter until fall as part of global warming legislation.

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