Tags: US | Fuel | Economy | Standard

New US 54.5 MPG Fuel-Economy Standard May Cost $157 Billion

Wednesday, 16 Nov 2011 02:57 PM

A proposed U.S. rule requiring automakers to double average fuel economy of vehicles to 54.5 miles per gallon by 2025 may cost $157 billion, two agencies said in a draft.

The standard would add an average of $2,000 to the price of each new passenger vehicle sold by 2025, the National Highway Traffic Safety Administration and Environmental Protection Agency said in a proposed rule posted today on NHTSA’s website. Benefits of $419 billion to $515 billion would offset the costs, the highway agency wrote.

The draft detailed a proposal agreed to in July by President Barack Obama’s administration and automakers including Ford Motor Co., Honda Motor Co., Toyota Motor Corp. and General Motors Co. to take effect in 2017. Daimler AG and Volkswagen AG were among automakers that didn’t sign on and weren’t part of a ceremony in Washington where Obama touted the rule as part of his plan to reduce the use of imported oil in the U.S.

The proposed rule requires annual fuel-economy increases of 5 percent for cars. Light trucks like pickups and sport-utility vehicles can raise fuel economy at 3.5 percent for the first five years the rule will be in effect. Then, unless regulators decide differently in a midterm review, trucks also would have to boost fuel economy by 5 percent a year.

“The proposed regulations present aggressive targets, and the administration must consider that technology break-throughs will be required and consumers will need to buy our most energy- efficient technologies in very large numbers to meet the goals,” Mitch Bainwol, chief executive officer of the Alliance of Automobile Manufacturers, said in an e-mailed statement.

Auto Dealers, Issa

The National Automobile Dealers Association has criticized the added cost to cars and light trucks, saying it could cost jobs in the U.S. at a time of high unemployment. Representative Darrell Issa, a California Republican, opened an investigation into how it was written, saying it was rushed and may jeopardize safety by reducing the weight of vehicles on the road.

California, which has the authority to write its own air- quality regulations, plans to issue its own rule, the White House said today in an e-mailed statement.

By 2025, U.S. fuel-economy standards and other fuel- efficiency moves will save 12 billion barrels of oil; reduce oil consumption by 2.2 million barrels a day, about one-fourth of the oil the country imports; and save consumers more than $8,000 a vehicle in fuel costs, the White House said in a statement today.

House Letter

Representative Ed Markey, a Massachusetts Democrat, and 107 other U.S. House members yesterday sent a letter to Obama supporting the rule.

“We believe that these standards to reduce petroleum use in cars and light trucks represent an opportunity to increase our national and economic security in an unprecedented way by dramatically decreasing our dependence on foreign sources of petroleum,” they wrote.

A proposed rule had been due Sept. 30 before regulators said they needed more time. The final rule is scheduled to be published next year.

A separate rule issued in 2009, which takes effect next year, requires automakers to increase average fuel economy to 35.5 mpg by 2016.


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A proposed U.S. rule requiring automakers to double average fuel economy of vehicles to 54.5 miles per gallon by 2025 may cost $157 billion, two agencies said in a draft.The standard would add an average of $2,000 to the price of each new passenger vehicle sold by 2025, the...
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Wednesday, 16 Nov 2011 02:57 PM
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