California Threatens to Pull Out of Fuel Economy Agreement

State wants feds to lower proposed credits for zero-emissions vehicles and to reject automaker proposal to ease MPG phase-in.

Published: 21-Jan-2010

WASHINGTON -- California officials have threatened to pull out of a historic compromise with U.S. automakers and the Obama administration for a 35.5 m.p.g. fuel economy standard by 2016 unless federal regulators side with the state on two key disputes.

The warning from California has triggered concern among Detroit automakers that the state could decide to enforce its own rules for greenhouse gas emissions from cars and trucks, setting off a wave of state-by-state laws rather than the national standards set by the Obama administration.

President Barack Obama's political adviser, David Axelrod, on Tuesday named the compromise, announced at the White House last May, as one of the administration's top accomplishments in its first year.

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