Senate OKs CAFE hike:

WASHINGTON — The Senate has approved a streamlined energy bill that will raise vehicle fuel economy standards 40 percent to 35 mpg by 2020. The Senate voted 86-8 Thursday night for the measure.

The phase-in of higher standards for cars and light trucks would begin with the 2011 model year. It would be the first congressionally mandated hike in the corporate average fuel economy program, or CAFE, since its creation in 1975.

Senate approval came after Democratic leaders bowed to veto threats by President Bush. They removed tax hikes and provisions to require utilities to use more renewable fuels.

The measure is expected to get a final vote of approval by the House of Representatives next week and then be signed into law by President Bush.

The bill would require a dramatic increase in alternative fuel production and provide incentives for production and purchase of energy-efficient products.

Automakers, in a historic reversal of course, supported the CAFE provisions, hoping to get some regulatory certainty for product planning.

But they failed in repeated attempts to add a provision to make clear that fuel economy standards take precedence over greenhouse gas emission rules expected soon from the EPA — or those that California and other states are ready to enforce, beginning with 2009 models.

Instead, Sen. Carl Levin, D-Mich., got sponsors of the energy bill to state publicly that it was their intention that greenhouse gas rules be “consistent” with fuel economy standards.

The exchange — known as a colloquy - could be used by the industry in future legal battles over greenhouse gas rules, both proponents and opponents said.

Sen. Dianne Feinstein, D-Calif., main sponsor of the fuel economy provision, later added a statement to the Senate record saying the energy bill was not intended in any way to prevent state or federal governments from also imposing greenhouse gas rules.

Thursday night’s Senate debate consisted mostly of senators congratulating themselves for their work.

“This is a victory for America,” said Sen. Tom Carper, D-Del. He said the bill would cut energy consumption and greenhouse gases without undermining the automobile industry.

Senate Commerce Committee Chairman Daniel Inouye, D-Hawaii, said the hike in standards will save more than one million barrels of oil a day by 2020. The nation uses about 21 million barrels a day, about eight million of them for cars and trucks.

Sen. James Inhofe, R-Okla., was one of the few to criticize the CAFE hike in the debate Thursday night. He said it will create more dangerous vehicles.

autoweek.com

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