Automakers Praise Higher Fuel Standard Proposal

July 7, 2008 - 8:23 PM

(CNSNews.com) - Representatives of the auto industry are praising a congressional compromise that would raise fuel-efficiency standards to 35 miles per gallon and offer government incentives for the development of "biofuels," in spite of having lobbied against higher standards earlier this year.

House Energy and Commerce Committee Chairman John Dingell (D-Mich.) announced last week that he had developed a compromise bill that would raise Corporate Average Fuel Economy (CAFE) standards to an average 35 mpg fleet-wide, up from 27.5 mpg for cars and 22 mpg for light trucks. The bill could be considered in the House this week.

"The Alliance commends Congressional leaders for reaching agreement on an aggressive, nationwide fuel economy program," Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers, said in a statement. "Upon adoption of this legislation, Congress will have established aggressive, nationwide fuel economy requirements, concluding a longstanding debate."

"Automakers are pleased that Congressional negotiators ultimately accepted the need for practical provisions like separate car and light truck standards and incentives for building more autos that run on non-petroleum-based fuels," McCurdy said. "We believe this tough, national fuel economy bill will be good for both consumers and energy security. We support its passage."

But in May 2007 testimony to the Senate Commerce Committee, McCurdy called CAFE standards "one-dimensional and incomplete." He voiced opposition to proposals that would have raised the car standard to 40 mpg and light trucks to 32 mpg.

He said automakers were "competing to bring these [alternative-fuel] vehicles to market, as soon as the technology is feasible, affordable and meets consumer expectations."

McCurdy lobbied in his testimony for legislation that would "foster more alternative fuel choices," "empower the research and development community to move us closer to breakthroughs on technologies," and "motivate consumers to conserve fuel and to consider purchasing one of the many fuel-efficient autos on sale today."

Charles Territo, director of communications for the Auto Alliance, told Cybercast News Service Wednesday that there was no contradiction between the position McCurdy took in May and the position he now takes.

"There was never opposition to increasing CAFE standards," Territo said. "This had to be a package and it had to include several elements and, as was said in the statement, had to provide mechanisms and help automakers balance the natural ups and downs of the product cycle."

He said the Senate bill McCurdy opposed in May was very different from the compromise "comprehensive" legislation now being considered. "The agreement that we agreed to included a number of measures not part of the Senate bill that helped make the CAF? program more realistic and reasonable," Territo said.

But some market analysts suggest manufacturers are supporting the measure because it doesn't put much pressure on them.

Max Schulz, a senior fellow at the conservative Manhattan Institute, said the bill "doesn't do much, doesn't do anything to increase supplies of energy" and suggested that manufacturers are supporting the increased standards because they're confident they can meet the goals.

The standards "are not as horrible as some are making them out to be," Schulz told Cybercast News Service. "I think they're doing it because they can afford to. There are a lot of folks in Congress that have been desperate to boost CAFE standards for years and in some respects this might get them off their backs for a while."

"Detroit's thinking is - even though they have been right in the past to oppose increases in CAFE standards on principle, that the government shouldn't be telling carmakers how to build their products - the thinking is Detroit thinks they can actually achieve these," Schulz said.

He added that measures to increase investment in bio-fuels, especially corn-based ethanol, could have a negative effect on consumers at the grocery store.

Previous ethanol mandates have "mandated a market for corn products that has boosted the price of corn, which in turn has boosted the price of so many other things," such as feed for livestock, "driving up the price for beef and other meat," Schulz said.

But Territo, and the manufacturers his group represents, maintain that the new standards are an "aggressive" and "dramatic" "challenge." Territo said the new fuel efficiency standards would represent "a 40 percent increase in current fuel economy standards," adding that he felt it was wrong to imply that manufacturers are supporting a weak measure.

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