Obama Sets New Rules of the Road

By STEVEN R. HURST
|  Tuesday, May 19, 2009  |  Updated 1:41 PM PDT
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If gas prices follow government projections, the cost of tighter regulations would be recovered through savings at the pump for consumers, according to a government official.

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President Barack Obama is asking consumers to put their money — up to $1,300 per new vehicle by 2016 — behind his plan for higher efficiency standards for cars and trucks and tougher rules on their greenhouse gas emissions.

In return, Obama said Tuesday in unveiling the plan, drivers would make up the higher cost of more fuel-efficient, cleaner vehicles by buying less gas at the pump. It would take just three years to pay off the investment and would, over the life of a vehicle, save about $2,800 though better gas mileage, the president said.

While requiring that vehicle carbon dioxide emissions be reduced by about one-third by the target date, the plan also calls for the auto industry to build vehicles that average 35.5 miles per gallon. Government regulations have never before linked emission and fuel standards.

"The fact is, everyone wins," Obama said during a Rose Garden ceremony attended by representatives of the auto industry and environmental groups as well as state and federal lawmakers.

"Consumers pay less for fuel, which means less money going overseas and more money to save or spend here at home. The economy as a whole runs more efficiently by using less oil and producing less pollution," he said. "And companies like those here today have new incentives to create the technologies and the jobs that will provide smarter ways to power our vehicles."

Obama said the proposal would save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years, akin to removing 177 million cars from the roads over the next 6 1/2 years.

In that period, he said, the savings in oil burned to fuel American cars, trucks and buses would amount to last year's combined U.S. imports from Saudi Arabia, Venezuela, Libya and Nigeria.

The plan, to be proposed in the Federal Register of pending rules and regulations, must clear procedural hurdles at the Environmental Protection Agency and the Transportation Department.

Under the changes, the overall fleet average would have to be 35.5 mpg by 2016, with passenger cars reaching 39 mpg and light trucks hitting 30 mpg under a system that develops standards for each vehicle class size. Manufacturers would also be required to hit individual mileage targets.

Consumers were already going to pay an extra $700 for mileage standards that had been approved previously, according to administration officials. The Obama plan adds another $600 to the price of a vehicle, bringing the total cost to $1,300 by 2016.

The plan would effectively end a feud between automakers and statehouses over emission standards. Fourteen states and the District of Columbia had urged the federal government to allow them to enact more stringent standards than the federal government's requirements.

Obama's plan gives states the higher standard for emissions they requested but also sets a single national standard, sought by automakers, and more time for automakers to make the changes.

The president claimed historic progress in his bid for a "clean-energy economy" and hailed the deal accepted by diverse interest groups as a "harbinger of a change in the way business is done in Washington."

The ceremony brought together longtime adversaries. California state Sen. Fran Pavley, who wrote the 2002 law that required auto companies to reduce tailpipe emissions of greenhouse gases, sat next to Rep. Sander Levin, D-Mich., a longtime champion of the auto industry.

Nearby, Michigan Gov. Jennifer Granholm, who has defended General Motors and Chrysler as they struggle with government aid, sat next to California Gov. Arnold Schwarzenegger, who was once depicted in a Detroit billboard that read, "Arnold to Michigan: Drop Dead!"

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