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President Obama will change America as we know it with new fuel rules

President Obama today delivered on a promise to elevate fuel-efficiency standards for the automotive industry while at the same time pledging to find new ways to cut down on carbon pollution.

He and members of his administration have put plans in place to create a national program that will dramatically improve efficiencies for automobiles sold from 2017 to 2025.

“This agreement on fuel standards represents the single most important step we’ve ever taken as a nation to reduce our dependence on foreign oil,” President Obama said in a presentation he delivered around lunchtime.

“Most of the companies here today were part of an agreement we reached two years ago to raise the fuel efficiency of their cars over the next five years. We’ve set an aggressive target and the companies are stepping up to the plate. By 2025, the average fuel economy of their vehicles will nearly double to almost 55 miles per gallon.”

The president was joined on stage today at the Walter E. Washington Convention Center in Washington by Transportation Secretary Ray LaHood, Environmental Protection Agency Administrator Lisa Jackson, several auto executives and UAW President Bob King. These individuals have signed onto and been instrumental in achieving this historic agreement. The participating auto companies are also providing advanced technology vehicles to display at the event.

“These standards will help spur economic growth, protect the environment and strengthen our national security by reducing America’s dependence on foreign oil,” LaHood said. “Working together, we are setting the stage for a new generation of clean vehicles.”

President Obama (pictured) spoke to an audience of 250 people, including representatives from the auto companies, UAW employees, environmental leaders, union representatives and members of Congress.

Thirteen companies were represented today, including Ford Motor Co., General Motors, Chrysler, BMW, Honda, Hyundai, Jaguar / Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo. Together these companies account for more than 90% of all vehicles sold in America. Volkswagen told TN reporter Richard Gray that the German carmaker does not support the program as it was presented today.

But U.S. officials are happy with what in general is compliance from the auto industry. “This is another important step toward saving money for drivers, breaking our dependence on imported oil and cleaning up the air we breathe,” said Jackson, administrator of the EPA.

“American consumers are calling for cleaner cars that won’t pollute their air or break their budgets at the gas pump, and our innovative American automakers are responding with plans for some of the most fuel-efficient vehicles in our history.”

OEMs appear excited by the challenges ahead.

"Honda embraces this new challenge and we welcome the competition we will have with other automakers that will result from these new standards, because it will benefit both our customers and the health of the planet," John Mendel, American Honda executive VP of sales, told reporters after the announcement.

Toyota said it will work "constructively" with President Obama and his team.

"The long-term objectives of this program are very ambitious, and we intend to meet the challenge," said James Lentz, president of Toyota Motor Sales USA.

"Toyota has embarked on the most aggressive expansion of hybrid, electric and hydrogen fuel cell cars of any automaker, and we are committed to continuing our demonstrated environmental leadership. We share the administration’s goal of achieving major advances in clean, fuel efficient vehicles. Obviously, there is still a great deal of uncertainty as to how the market will respond and what vehicle technologies consumers will embrace, which is why we are rolling out and testing a range of alternative fuel options."

Because the 54.5 mpg standard has been put in motion by President Obama, a Ceres report released today says consumers will save $107 billion in fuel costs in 2030. Had the standards reached 60 mpg, which was the highest standard sought, the savings would have been estimated at $152 billion.

A total of 484,000 new full-time jobs would be a spin-off effect, the report says, including 43,000 new jobs in the auto industry. The number of jobs was projected higher earlier in the day, but Ceres revised the numbers after the specifics of the Obama plan were revealed.

"As manufacturers of and investors in the technologies that make strong CAFE standards possible, we applaud the administration for striking a deal that sets an ambitious fuel economy target," Tim Greeff, political director for the Clean Economy Network, an advocate for "the development of a clean economy," said today after the announcement.

"While we believe a stronger standard is technologically feasible and cost-effective, we are confident that achieving 54.5 mpg by 2025 will create American jobs, unleash technological innovation and make the U.S. auto industry more competitive."

States projected to see the most job growth, according to Ceres research, are Indiana, Michigan, Alabama, Kentucky, Tennessee, Ohio, North Carolina, New Hampshire, Vermont, Oregon, New York and Missouri. That's why there will be such a heavy Michigan delegation at the president's announcement today.

In a statement released this afternoon, General Motors praised the Michigan politicians for their efforts. The statement said, in part: "While future fuel economy targets are ambitious, the proposed CAFE rule represents a national approach and provides regulatory certainty for our industry. Additionally, the proposed rule includes flexibility that recognizes consumer needs and potential changes in technology and economic conditions. GM appreciates the strong, bi-partisan support of Michigan's congressional delegation which helped bring about an agreement that recognizes how vital auto manufacturing is to America's future jobs and economic growth."

Chrysler issued a statement that was similar to GM's. It also praised President Obama and Michigan power brokers for making this happen. "Chrysler Group ... appreciates the continuous efforts of the entire Michigan congressional delegation in supporting U.S. manufacturing and jobs, consumers and the environment."

Jack Gillis, the Consumer Federation of America’s public affairs director and author of The Car Book, said families benefit under the rules Obama has ordered to be implemented.

“The president has taken a giant step in reducing the burden of rising gas costs on the American family, reducing our dependence on foreign oil and keeping the U.S. car companies competitive," Gillis said. "President Obama demonstrated an uncanny ability to bring together consumer advocates, car companies, unions and environmentalists to responsibly address America’s energy challenges.”

Separately, the EPA said today it would propose provisions for:

1. Credits for improvements in air conditioning (A/C) systems, both for efficiency improvements and for use of alternative, lower global warming potential refrigerant.

2. Treatment of compressed natural gas.

3. Continued credit banking and trading, including a one-time carry-forward of unused 2010-2016 credits through 2021.

The upgraded rules are exciting Americans. "By 2030, this round of standards could save more oil than we currently import from Saudi Arabia and Iraq, combined," said Therese Langer, transportation program director of the American Council for an Energy-Efficient Economy.

But there is a new concern. "Electric vehicles are oil-free and typically quite efficient," Langer said. "But as these vehicles reach the market in greater numbers, we cannot afford to ignore the power plant emissions associated with vehicle charging."

The American Automotive Policy Council joined many other organizations in issuing a statement of support for the president's plan.

“The American automotive manufacturing industry has led the way on innovation and technologies that are helping to protect our environment while also providing customers the affordable vehicles they need and want. The industry’s commitment to improving fuel-efficiency standards from 2017 through 2025 under the continued National Program represents a smart and balanced approach that also carefully considers the important impact the auto manufacturing industry has on our nation’s economy, with millions of American jobs at stake.

"Today’s agreement is the result of all the stakeholders involved — the president, leaders in Congress, the industry — coming together to work in good faith to achieve a solution that protects a vital part of our national economy while also protecting our environment.”

The Ceres coalition says the changes afoot are good for America.

“We commend the Obama administration on today’s important step to boost fuel economy and reduce vehicle emissions, which will create jobs, drive innovation, save consumers money and reduce our dependence on foreign oil,” said Mindy S. Lubber, president of Boston-based Ceres, a national coalition of investors, environmental groups and public-interest organizations.

“The stronger the standards, the greater the economic benefits, and we urge the administration to ensure a strong national program.”

Stage participants today were:

1. Dan Akerson, chairman and CEO, GM.

2. Alan Mulally, president and CEO, Ford.

3. Sergio Marchionne, CEO, Chrysler.

4. John Krafcik, president and CEO, Hyundai Motor America.

5. Jim Lentz, president and COO, Toyota Motors Sales USA.

6. Josef Kerscher, president, BMW Manufacturing Co.

7. Andrew Goss, president, Jaguar Land Rover North America.

8. Doug Speck, president and CEO, Volvo Cars North America.

9. John Mendel, executive VP, American Honda.

10. Scott Becker, senior VP-administration and finance, Nissan North America Inc.

11. James O’Sullivan, president and CEO, Mazda North American Operations.

12. Bob King, president, UAW.

13. Secretary Ray LaHood, Department of Transportation.

14. Administrator Lisa Jackson, EPA.

Audience VIPs included:

1. Representative Nancy Pelosi, D-CA, Democratic leader.

2. Representative John Dingell, D-MI.

3. Representative Henry Waxman, D-CA.

4. Representative Ed Markey, D-MA.

5. Representative Dale Kildee, D-MI.

6. Representative Sander Levin, D-MI.

7. Representative Gary Peters, D-MI.

8. Representative Tim Walberg, R-MI.

9. Representative Hansen Clarke, D-MI.

10. Tomas Loveless, vice president sales, Kia.

11. Yoichi Yokozawa, CEO, Mitsubishi Motors North America.

For some, the stars were the cars in Washington. Advanced vehicles on display today were:

1. 2012 Range Rover, Model "Evoque."

2. 2012 Volvo S60 T5.

3. 2011 Nissan Leaf (plug-in electric vehicle).

4. 2010 Toyota Plug-In Hybrid.

5. 2011 Hyundai Sonata Hybrid.

6. 2012 Honda Civic Hybrid.

7. 2011 Ford F-150 4x4 with "EcoBOOST."

8. 2011 Dodge Ram 4x4 SLT.

9. 2011 Chevy Cruz LTZ.

10. 2011 Kia Optima Hybrid.

Related story
Full text of the president's speech:

You can reach TN's Hawke Fracassa at [email protected] or by phone at (248) 747-1550.

Image source: Wikipedia


Anonymous (not verified)    July 29, 2011 - 1:08PM

Sounds too much like another example of the gov getting involved Where it shouldn't. Automated are already moving towards more fuel efficient cars on their own. Federal involvement takes the competition out of business when everyone has to meet the same requirement in the same time frame. Would automated have been on board with this if the bailout didn't happen a few years ago? Something to think about.