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White House proposes new, stricter national fuel efficiency standards

In proposing new fuel economy standards for vehicles, the Obama administration is angling for a triple victory.

The new corporate average fuel economy, or CAFE, standards would resolve the spat between California and auto manufacturers over implementing the state's emissions regulations, and would burnish the administration's credibility on climate issues. They would also throw the ailing U.S. auto industry a lifeline, even while asking manufacturers to hike vehicle efficiency to new, fuel-sipping heights.

Environmental groups, as well as automakers, have applauded the regulation as a way to boost the industry, even though cars will now, on average, have to get 5 percent better fuel efficiency every year through 2016.

Corporate average fuel economy will reach 35.5 miles per gallon that year -- four years before the government's original target date of 2020, set in the Energy Independence and Security Act of 2007, a senior White House official said yesterday.

With the 35.5 mpg number and the advanced deadline, the auto industry may be taking a collective gulp. But efficiency advocates are saying that the target is not only achievable -- it should also whip the industry into shape to compete internationally.

"There's no mystery here to how manufacturers could achieve the standards that have just been announced using known technologies," said Therese Langer, director of the transportation program at the American Council for an Energy-Efficient Economy. "Five percent is a lot. It's doable."

For once, the auto industry may see it that way, too.

Automakers try to comply

"We will need to use every engineer we have and every investment dollar available to make our vision of sustainable mobility a reality," Dave McCurdy, president of the Alliance of Automobile Manufacturers, said in a statement.

Carmakers have long battled California's attempt to set a higher bar for fuel economy, arguing that if the state succeeded -- inspiring a dozen other states to follow it that account for up to half the domestic auto market -- manufacturers would face a "patchwork" of regulations that would make it harder for them to know what cars to develop.

With the proposed uniform national standard, automakers are expected to drop their challenges to California's efforts. That would lead the way to a stable business plan, as they would then know what target they are working toward, and on what timetable, for the entire U.S. market.

Langer said it's a tough bargain: On the one hand, automakers get a uniform standard, but on the other hand, it's a very high standard set by California's ambitious goals.

"It's a tradeoff of what they see as a uniform and certain policy over the next couple of years," Langer said of the carmakers. "And to their credit, they're ready to accept it and move on."

Although the Obama proposal gives Detroit four fewer years to meet the standard, its schedule is gentler on the carmakers than California would have been. According to the White House official, the California plan would have required automakers to make larger improvements early on. By 2015, both plans arrive at the same fuel economy target.

The reason, the official said, was economic.

Some pains necessary for competitive health

"It starts out a little bit more gradual, and that was important to give the car companies the ability to make the investment and the adjustment," the official said. The representative estimated that meeting the policy would raise the cost of each car about $1,300.

As for whether to expect hordes of matchbox cars on American roads by 2016, the official seemed skeptical. "Yeah, you will see some changes," the representative said, but by and large, the administration expects automakers to meet the standards through invisible changes in engines, air-conditioning units and the like.

Those changes will involve some growing pains, some observers said, but it's a necessary step to make Detroit competitive in the world's nascent clean-car market.

"We think having the U.S. match the California standards is also important for the competitive health of our auto industry," Bill Van Amburg, senior vice president at CalStart, wrote in an e-mail. CalStart is a California-based group advocating for cleaner transportation.

"The rest of the world is already moving to more efficient tech for vehicles -- this gets our auto industry back in the game -- and with public funding support to accelerate them on this path."

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