Senate votes for first rise in car fuel standard in 32 years

*Ed Pilkington in New York
Saturday June 23, 2007
The Guardian *

Democrats in the US Senate have taken a tentative step in the fight
against global warming by imposing the first increase in fuel efficiency
standards on car manufacturers in almost 20 years.
The Democratic majority fought off resistance from Republicans and
fierce lobbying from the big three Detroit-based car companies -
Chrysler, Ford and General Motors - to raise average fuel efficiency
benchmarks for all new cars to 35 miles per gallon (15km/litre) by 2020.
The existing standard of 27.5mpg has remained unchanged since 1989.
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Gas-guzzling four-wheel-drive cars, which have to meet an average of
22.2mpg, are for the first time covered by the same regulations as
passenger cars.
Harry Reid, the Democrats’ leader in the Senate, said the provision,
which is in an energy bill making its way through Congress, “starts
America on a path toward reducing our reliance on oil”.
However, he lamented the fact that another important element of the bill
- a package of $32bn (£16bn) of tax incentives for alternative energy
supplies that would be paid for by a new tax on oil companies - was
blocked when it was talked out of play by a Republican filibuster. “Big
oil seems to do pretty well here on Capitol Hill,” Mr Reid said after
the vote. The debate on US energy needs now passes to the House of
Representatives, which could hear it as early as next week.
Thursday night’s debate was preceded by massive lobbying by both the oil
companies and the car manufacturers, which were backed by the United
Auto Workers union. The strength of the big three car companies, coupled
with politicians’ wariness of forcing an increase in petrol prices for
fear of upsetting the electorate, has meant that the country has for
many years avoided imposing greater fuel efficiency. Fuel efficiency
standards were first imposed in 1975 in the wake of the Arab oil
embargo, and have been raised only once since then.
The measure was interpreted as a big blow for the car companies, with
the Detroit News casting it as “a bitter defeat for Michigan
automakers”. Chrysler had sought to derail the attempt to raise
efficiency standards by warning that the bill could bankrupt the company.
Carl Levin, a Democratic senator from Michigan who led opposition to the
rise in fuel standards, complained that there was one law for carmakers
and another for oil companies. He said the outcome of the bill’s passage
in the Senate meant that “big oil with huge profits does nothing but our
auto industry with their non-profits took a hit”.
Large farmers and ethanol producers were major winners from the Senate
battle as the legislation allows for a sevenfold rise in ethanol
production for use in motor fuel by 2022, to 36bn gallons (136bn litres)
a year. Most of that demand will be met by maize growers, despite
ecologists’ doubts over the environmental benefits of maize-based ethanol.

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