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Obama Plan Paves Way for Unified Mileage/Emissions Standards

By KBB.com Editors on May 19, 2009 3:16 PM
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President Obama today presented a landmark proposal aimed at moving the country ahead on the road to a clean energy economy. Speaking in the White House Rose Garden and flanked by members of his administration and key auto executives, Obama offered a comprehensive approach that will significantly boost fuel economy numbers and resolve the ongoing legal wrangling that has long set automakers and the state of California at odds over supplemental greenhouse gas emissions issues.

The president, who characterized the existing rules governing fuel economy as "inadequate, uncertain and in flux," called for the adoption of a new single-standard formula that will accelerate the CAFE (Corporate Average Fuel Economy) requirement to 35.5 mpg by 2016 -- four years earlier than the existing 2020 mandate -- and provide automakers with much needed certainly and clarity regarding how to proceed in their quest. To reach the ambitious goal by that date, passenger cars would have to meet a 39-mpg bogey and light trucks would be required to average 30 mpg, serious bumps from their existing 27.7 mpg and 23.0-mpg numbers.

As part of his plan, Obama also indicated that automakers and the state of California have agreed to drop their respective lawsuits and abide by whatever greenhouse gas regulations emerge when the legislation finally emerges from congress and gets signed into law. The proposal also contains a provision that would empower the Environmental Protection Agency enact legislation to regulate tailpipe emissions.

According to administration estimates, the benefits of this wide-ranging fuel-economy legislation will be equivalent to cutting U.S. oil consumption by 1.8 billion barrels over the life of the program and will reduce total greenhouse gas emissions by 900 million metric tons, the equivalent of taking 177 million vehicles off of the road. While enacting these new, tougher regulations is expected to add about $1,300 to the price of an average vehicle, analysts are predicting their improved mpg numbers will see buyers recoup that premium in about three years if gasoline moves to the anticipated $3.50 level.

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