Senate Debate Over Fuel Economy Continues

Republican-backed plan sets no mileage or efficiency goals.

Published: 13-Mar-2002

WASHINGTON (Reuters) - Senators from U.S. auto-making states tried to slow momentum for stricter fuel standards on Tuesday by proposing the government first consider the impact of higher mileage requirements on passenger safety and job losses in the auto industry.

The plan, offered by Michigan Democrat Carl Levin and Missouri Republican Christopher Bond, does not call for a specific increase in the miles per gallon that a vehicle must achieve. Instead, it counters a rival bipartisan proposal unveiled last week to boost mileage requirements 50 percent.

The battle over stricter mileage requirements for gas-guzzling sport utility vehicles and pick-up trucks is one of several contentious issues in a broad energy bill designed to reduce U.S. dependence on foreign oil.

The Democratic-led Senate, which began work on an energy bill last week, took up the fuel efficiency debate on Tuesday.

The issue pits the auto industry, which opposes a big boost in the 1970s-era standards, against environmental groups.

RIVAL PLAN BOOSTS MILEAGE

A rival proposal offered last week by Massachusetts Democrat John Kerry and Arizona Republican John McCain would make automakers boost the combined Corporate Average Fuel Economy (CAFE) of cars and sport utility vehicles from the current 24 miles per gallon (mpg) to 36 mpg by 2015.

Kerry and McCain said their proposal would cut oil imports by about 1 million barrels per day (bpd) and reduce pollution. Gasoline demand accounts for 44 percent of the average 19.8 million barrels of petroleum used in the United States daily.

Levin and Bond said the proposed higher mileage requirements would cost U.S. jobs, hurt the competitiveness of American automakers and threaten the safety of drivers who would have to use lighter-weight vehicles.

"CAFE has discriminated against the American automobile industry," said Levin, whose constituency includes Detroit.

A big hike in fuel efficiency could be achieved only with smaller vehicles which are less safe, said Bond, who has Ford and General Motors plants in his home state of Missouri.

"People with soccer teams -- they want mini-vans," Bond said on the Senate floor. "I don't want to tell a mom or dad in my home state that they can't get the SUV they want because Congress thinks it's a bad choice."

Democrat Barbara Mikulski of Maryland backed the less stringent fuel proposal, saying consumers should not be forced to driver smaller cars that would result from higher gasoline requirements.

"Mothers want to be in the functional civilian equivalent of a (military) Humvee," Mikulski said. "They're scared for their children and they're scared for their safety. So they go big and they go bulk."

The Levin-Bond plan would give the Transportation Department 15 months to come up with new fuel standards for light trucks and 24 months for passenger cars. The department would decide the target for higher mileage requirements.

However, in addition to looking at the potential effect on vehicle safety and jobs, the plan would mean the Transportation Department must consider the "economic practicability" and "technological feasibility" of new fuel standards.

TAX CREDITS FOR NEW VEHICLES

To help reduce gasoline demand, the Levin-Bond plan would provide a tax credit of up to $6,000 for buyers of electric vehicles. It would also offer an $11,000 tax credit for fuel cell vehicles and a $5,000 tax credit for cars that run on combined gasoline and electric engines.

Service stations would be able to deduct up to $100,000 in the first year they install alternative refueling equipment like pumps and storage tanks, under the Levin-Bond approach.

In addition, the federal government would be required to purchase more hybrid and alternative fuel vehicles.

Environmental and consumer groups slammed the proposal.

The Alliance to Save Energy said the plan would delay long-overdue tightening in fuel standards. The League of Conservation Voters called it a "weak alternative that would do little to save oil and nothing to improve auto safety."

Kerry said the arguments against more stringent fuel standards were "bogus" and "Alice-in-Wonderland" complaints, because U.S. automakers were already producing some cars and light trucks with high mileage.

For example, Kerry said Ford Motor Co. has advertised a new sport utility vehicle it plans to introduce in 2003 that will get 40 mpg. Those higher fuel standards should be extended to the rest of automakers' fleets, he argued.

"The fact is that every single improvement that the automobile industry has made in America they've been dragged kicking and screaming every step of the way," McCain said.

In addition to CAFE standards, the Senate has yet to decide the divisive issue of whether to open the Arctic National Wildlife Refuge to oil drilling.

Senate Democratic leaders said on Tuesday that they hope the energy bill could be finished by the end of next week.

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