Senate Approves Bill to Boost Fuel Economy

The Senate passed an energy bill 65-32 late Thursday that mandates increases in ethanol fuel production and includes a hike in fuel efficiency standards for motor vehicles to 35 miles per gallon from 25 by 2020.

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RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

After two weeks of wrangling, the Senate late last night passed an energy bill that is decidedly green. The legislation mandates a big jump in ethanol fuel production and includes the first major hike in fuel-efficiency mandates for motor vehicles in more than two decades. Opponents managed to exclude a tax package favoring renewable energy at the expense of oil companies.

NPR's David Welna is following this story and joins us now. Good morning.

DAVID WELNA: Good morning, Renee.

MONTAGNE: And of course, David, this legislation still has a long way to go, but - or rather how big of a deal is the bill anyway?

WELNA: Well, Renee, one Republican leader last night called this the anti-energy bill, but it's one that most Democrats would have loved to have passed two years ago, when a Congress run by Republicans enacted another energy bill that gave big tax breaks to oil and gas companies and fairly modest subsidies for renewable energy such as solar and wind as well as for homegrown fuels, mainly corn-based ethanol.

This new energy bill is far greener in that it has virtually nothing in it for the oil companies, and it nearly quintuples the amount of ethanol production that was mandated in the last energy bill, so that by the year 2022, 36 billion gallons of it will be produced.

But I think the other huge change from the last energy bill is that this one, for the first time in 22 years, actually mandates a 40-percent improvement by the year 2020 in CAFE standards. That's average mileage that cars and small trucks are required to get. That CAFE standard will jump from 25 to 35 miles a gallon.

MONTAGNE: Now, supposing these new CAFE standards do become law, how soon might they effect the options that we would be seeing at a new car dealership?

WELNA: Well, you'd be pretty disappointed, I think, if you expected any big changes soon because the Senate is taking a very gradualistic, incremental approach. It's given automakers 13 years to raise their average mileage by 10 miles a gallon, and the National Highway Transportation and Safety Administration, or NHTSA, is tasked with figuring out how quickly that better mileage should be phased in.

And in what was a major concession to automakers, NHSTA can also decide whether it's even worth holding the auto industry to these new standards.

Let's listen to California Democrat Dianne Feinstein, who led the fight for new CAFE standards, explaining this loophole last night on the Senate floor.

Senator DIANNE FEINSTEIN (Democrat, California): The fleet-wide average must be met, unless NHSTA determines, based on clear and convincing evidence, that a 35 mile-per-gallon fleet-wide average would not be cost-effective for the nation. From 2021 to 2030, NHSTA must set fuel economy standards that are the maximum feasible.

WELNA: Now, this legislation had mandated a four-percent annual mileage increase for that period, but it was dropped yesterday in order to broaden support for the higher CAFE standards.

And another thing that got dropped, and this is something that car safety advocates have denounced, is a provision that would have gotten rid of those big grills and cow catchers that some SUVs have that do nothing to protect their passengers but that can do a lot of harm to others in a crash.

MONTAGNE: Despite those criticisms, does this bill signal a big shift in how Congress is responding to rising energy prices?

WELNA: Well, I think its intent is to emphasize homegrown fuels and conservation. But, you know, in a 51-to-49 Senate, there are limits to what can really get done. For example, a major amendment requiring that 15 percent of electricity be generated from renewable sources such as wind or biofuels was blocked from consideration, and so was a tax provision that would have hit oil companies with nearly $30 billion in new taxes over the next decade in order to help subsidize renewable energy.

And in all this discussion not one senator proposed any incentives for Americans to cut back on their driving, which would be the quickest way to drive down prices at the pump.

MONTAGNE: And finally, in a word, if the bill makes it to the president's desk, will he sign it?

WELNA: He says he'll sign it, but there's also a veto threat out there because of price-gouging provisions in it, so we'll have to see.

MONTAGNE: Thanks very much. NPR's David Welna.

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