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Automakers eye House after fuel fight

From Reuters| June 25 , 2007

The fight over higher automobile fuel efficiency standards shifts to the House of Representatives this week with big car companies regrouping after a stinging defeat in Senate energy legislation.

Major changes are still needed to make this bill achievable," Ford Motor Co. government affairs Vice President Bruce Andrews said.

The Senate measure, the first major rewrite of efficiency goals in 30 years, would require the U.S. vehicle fleet of passenger cars, sport utilities, pickups and vans average 35 miles per gallon by 2020, a 10 mpg improvement over today's standards.

Japan's Toyota Motor Corp. called the efficiency provision in Senate energy legislation approved last Thursday a "very aggressive target" and "extreme."

On Wednesday, the House Energy and Commerce Committee chaired by industry ally Rep. John Dingell, a Michigan Democrat, will prepare its energy bill for consideration by the full House. It does not currently include a mileage proposal.

"This is a long process and we are continuing to work constructively to develop reasonable fuel economy standards that are affordable," said Dave McCurdy, president of the industry's chief trade group, the Alliance of Automobile Manufacturers.

Ron Gettelfinger, president of the United Auto Workers, which represents hourly employees at Ford, General Motors Corp., and DaimlerChrysler AG's Chrysler Group, said the Senate bill threatened jobs.

The auto industry and their congressional allies waged an unsuccessful campaign to replace the stricter Senate efficiency initiatives with more modest targets, but did persuade lawmakers to scale back some provisions.

For instance, the Senate dropped a requirement for 4 percent annual efficiency gains after 2020 and modified the expected contribution of alternative fuels to reach the 35 mpg target.

Proponents of sharply higher efficiency, including some consumer and environmental experts, believe upgrading 1970s-era gasoline mileage standards under the Corporate Average Fuel Economy program is the most viable way to cut oil dependence, although they also support gasoline alternatives.

Mark Cooper, director of research for the Consumer Federation of America, calls it the "sweet spot of energy policy."

Dingell's House panel could not agree on a fuel standards approach, so the committee leadership stripped it from the bill last week and promised to take it up in the fall as part of climate change legislation.

On autos, his proposal would establish grants to increase the availability of alternative fuels, like E85, a gasoline-ethanol blend, biodiesel and plug-in hybrids. It would also create a loan guarantee program for production of advanced batteries, crucial for electric cars.

Although Dingell wants to defer fuel standards, at least one member of his committee, Massachusetts Democrat Edward Markey, disagrees. Markey plans to sponsor a fuels amendment, possibly during this week's committee review of the bill or during consideration by the full House.

While an aide would not confirm details of Markey's plan, he has previously advocated updated fuel economy standards that would boost efficiency to 35 mpg by 2018.

"It is our intention that a strong fuel economy provision is in this summer's energy package. We want to see action this summer," said Markey spokeswoman Jessica Schafer. She said the Senate action may boost support in the House.

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