Senate to Debate Higher Fuel Standards

A new energy bill sets up a Senate debate on a measure to increase fuel economy standards. It would require that cars, trucks and SUVs achieve an average of 35 miles per gallon by 2020. That's 10 miles per gallon over current levels.

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RENEE MONTAGE, host:

A controversial energy bill would require vehicles on U.S. roads to raise the gas mileage standard to 35-miles per galleon by the year 2020.

NPR's Jack Speer reports.

JACK SPEER: Fuel economy standards have been around since the Arab oil embargo of 1973. The standards, known as CAFE for Corporate Average Fuel Economy, were supposed to reduce U.S. dependence on foreign oil. But over the years, vehicles have gotten bigger and heavier and hope for economies never materialized.

In a manufacturing summit in Washington last week, North Dakota Democrat Byron Dorgan warned the heads of GM, Ford and Chrysler that higher fuel efficiency standards are coming.

Representative BYRON DORGAN (Democrat, North Dakota): I have previously voted against CAFE standards, but I just want you to know, I think the issue is over. I think you've lost that issue.

SPEER: The auto execs concede they will probably have to live with some increase, but GM Chairman Rick Wagoner says Congress needs to look at other alternatives.

Mr. RICK WAGONER (Chairman, General Motors Corp.): Things like bio-fuels, encouragement of advanced technologies; these are the kind of things that can actually get us to the point of reducing the reliance on oil and oil imports.

SPEER: But environmental groups are skeptical. They say automakers have dragged their feet when it comes to upping fuel efficiency. It's not clear whether a new mileage standard will actually emerge. An alternative proposal has been floated by two Democratic senators from Michigan.

Jack Speer, NPR News, Washington.

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What's in the Energy Bill?

The controversial energy bill now on the Senate floor takes a different approach than the bill pushed through by a Republican Senate in 2005. That measure sought to increase domestic oil production through subsidies and other incentives. With Democrats now in charge, the new bill focuses on decreasing consumption of oil and gasoline. Here's a look at the bill's major provisions:

Fuel Economy: The bill would, for the first time in decades, raise average fuel-economy standards for cars and SUVs or light trucks (up to 10,000 pounds) — from 25 mpg to 35 mpg by 2020 (a roughly 40 percent increase). This provision is the most controversial, especially with the auto industry, which argues that it could push up the production costs of each vehicle by thousands of dollars. That has led some Democrats to propose federal financial relief for automakers.

Renewable Fuels: The bill mandates the use of 15 billion gallons of biofuels annually by 2015 and 36 billion gallons by 2022 (up from 8.5 billion gallons in 2008). In the beginning, most of the biofuel would be corn ethanol. Beginning in 2016, the bill mandates annual increases of 3 billion gallons in the use of advanced biofuels – such as "cellulosic" ethanol, which can be made from switch grass, wood chips or agricultural waste. Oil refineries and food manufacturers – who warn that diverting corn to ethanol production could hike up food costs — oppose this provision.

Energy Efficiency: The bill sets energy-efficiency standards for home appliances, heating and cooling systems, lights and residential boilers. It requires federal agencies to get at least 15 percent of their electricity from renewable sources by 2015 and to reduce oil consumption by 20 percent. It also requires regular government review of efficiency standards.

Carbon Capture and Storage: The bill promotes research into methods of capturing carbon dioxide emissions from power plants and storing them underground.

Public Buildings: The bill requires energy efficiency in federal buildings, mandating a 20 percent reduction in operating expenses over five years through the use of more-efficient lights, heating and cooling. It also authorizes three demonstration projects that put "green-building" techniques into practice.

Energy Security: The bill asks the secretary of state to establish "strategic energy partnerships" with the governments of major energy producers and consumers to increase international energy security.

Price Gouging: The bill makes oil industry "price gouging" a federal crime during times when the president has declared a temporary "national energy emergency" — much like the emergencies that states declared after Hurricane Katrina. The Federal Trade Commission would also be given greater authority to investigate possible manipulation of the oil market – including refinery shutdowns. Oil companies and the Bush administration strongly oppose this provision, which has prompted a veto threat from President Bush.

SMALLER ITEMS:

The bill also includes a host of smaller items, such as:

—incentives to spur new inventions in light bulb efficiency

—block grants to state and local governments to reduce energy use

—a grant program to reduce school bus idling

—authorization for an initiative to improve car batteries

Written by Cathy Shaw and Anne Hawke.

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