Better Gas Mileage Focus of Energy Bill Debate

The Senate is debating a new energy bill that would raise average mileage standards for cars, light trucks and SUVs, from 25 to 35 miles per gallon by 2020. The Auto Industry argues that hiking mileage standards will mean lost jobs and less safe vehicles for Americans.

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Advocates for better gas mileage are trying again. They failed to boost vehicle fuel efficiency standards in an energy bill that Congress passed a couple of years ago. But now, a new bill is being debated in a Senate now controlled by Democrats.

The centerpiece is a measure requiring that within the next 10 years, fleets of cars and SUVs and light trucks get a combined average of 35 miles per gallon. That would be 10 miles per gallon more than current levels.

NPR's David Welna reports on why some lawmakers want the change and why the auto industry is resisting.

DAVID WELNA: The main thrust of the new energy bill is to shrink the nation's daily drink of 21 million barrels of oil, most of it imported. California Democrat Dianne Feinstein says the easiest way to do this is to require better mileage from American carmakers, something Congress hasn't done for more than two decades. Feinstein says the measure she champions would by the year 2025 reduce that daily oil consumption by more than two million barrels.

Senator DIANNE FEINSTEIN (Democrat, California): Now this is just about the amount of oil imported today from the Persian Gulf. It's an 18 percent reduction in carbon dioxide emissions from anticipated levels. And we estimate that it's $70 billion in consumer savings. This means that American households could save between 700 and $1,000 a year in cost.

WELNA: It took 10 years to phase in the corporate average fuel efficiency, or CAFE standards that Congress passed in 1975. Delaware Democrat Tom Carper notes that while the auto industry met those standards, it stoutly opposed raising them again.

Senator TOM CARPER (Democrat, Delaware): For 22 years, whenever there's been discussion in raising fuel efficiency standards for cars, trucks and vans, we've heard from the auto industry, if you do that, you'll cost us market share - especially the big three.

If you do that, we'll lose money. If you do that, we'll close plants. You do that and we'll cut jobs, lay people off. So for 22 years, we've listened to them and we've not done anything with CAFE. And for 22 years, we've lost market share. We've lost jobs. We've lost money. They've closed plants.

WELNA: Now the auto industry says meeting the new mileage standards can't be done. Charles Territo is a spokesman for the Alliance of Automobile Manufacturers, which lobbies for the major automakers.

Mr. CHARLES TERRITO (Spokesman, Alliance of Automobile Manufacturers): Manufacturers share the priority and the concerns about energy security and reducing emissions. But we believe that any fuel economy standards need to be technologically achievable.

WELNA: And you don't think these are?

Mr. TERRITO: And we don't think these are.

WELNA: To underscore the point, the carmakers' group is airing a series of radio ads.

(Soundbite of radio ad)

Unidentified Woman #1: Hey, how do you like your car?

Unidentified Woman #2: Oh, I love it. I know it's a little bigger than others, but we really feel safe in it.

Unidentified Woman #1: Well, I hope you're planning on holding on to it for a while.

Unidentified Woman #2: Why?

Unidentified Woman #1: Because Congress is about to pass a law that's going to make it harder and harder to find a car like yours.

WELNA: The ad then tells listeners to contact their senators and, quote, "Tell them to say no to extreme fuel economy mandates." California Democrat Feinstein says such ads are typical of the auto industry.

Sen. FEINSTEIN: For 22 years, they have done nothing and they fight everything. So it's very disingenuous, I think, to say these things. And they're trying to go worst case. They're trying to frighten people, and this can be done. Other companies have done it.

WELNA: Instead of better mileage, the car companies are emphasizing alternative fuels. Outside the Capitol yesterday, Michigan Democrat Carl Levin posed for a photo in Ford's flexible fuel hybrid SUV, the Escape.

Senator CARL LEVIN (Democrat, Michigan): I'd rather you take a picture of the seat belt than me.

(Soundbite of laughter)

WELNA: Levin is one of several Democrats from car-making states who oppose the new mileage requirements.

Sen. LEVIN: We're setting an arbitrary standard here. Instead of leaving it up to an agency or up to experts to set it, it's going to be done by Congress. That always has all kinds of risks in it, when you do it arbitrarily.

WELNA: Fellow Michigan Democrat Debbie Stabenow says Detroit is already at a disadvantage with its foreign competitors.

Senator DEBBIE STABENOW (Democrat, Michigan): We're all about moving our industry to be competitive, but there's a larger set of issues here: unfair trade, the cost of health care, who's investing. And every time our companies are asked to put in dollars into a regulatory system that slows them down, that's less available for advanced technology.

WELNA: Still, the Michigan senators acknowledge some kind of tougher mileage standards seems inevitable. They're devising a rival plan, putting less of an onus on the light trucks that continue to be Detroit's big moneymakers.

David Welna, NPR News, the Capitol.

INSKEEP: You can find out about other provisions in the energy bill at npr.org.

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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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