House reaches deal on fuel economy

As expected (recently), the House leadership reached a deal on the energy bill to “stick with the Senate version’s goal of making the new automotive fleet achieve average fuel efficiency of 35 miles a gallon by 2020, about 40 percent higher than current averages.” The bill could be brought to a vote as early as next week.

The key, of course, was getting, the approval of Rep. John Dingell (D-MI), the car industry’s key congressional front man ally. What did the forces of intelligent fuel economy standards give up? “At Dingell’s urging it has tougher standards for cars than for light trucks.” And then there is the old flex fuel vehicle loop-hole clause:

One gives automakers credit against federal mileage targets for producing flexible-fuel vehicles capable of using gasoline with as much as 85 percent ethanol. There is, however, no way to tell if such vehicles actually use biofuels or regular petroleum-based gasoline, and critics call the credits a major loophole.

Under the agreement reached last night, those credits will be extended to 2014, then phased out to zero by 2020. Dingell and U.S. auto companies had wanted the current maximum credit, 1.2 miles gallon, to remain unchanged through 2018 or longer.

Not a bad compromise!

The other obstacle was a Dingell request that the Environmental Protection Agency not be allowed to override the bill with a decision on limiting tailpipe emissions of carbon dioxide, a greenhouse gas. The bill will not interfere with the agency’s authority or its ability to approve of a California plan to set tougher tailpipe emissions standards, said a Democratic aide.

In a statement, Dingell said the agreement “prescribes standards that are both aggressive and attainable” while “providing incentives to preserve approximately 17,000 domestic assembly plant jobs.”

The energy bill will have other features than fuel economy:

Democratic leaders also plan to require under the bill that utilities use renewable energy as the source of 15 percent of their electricity generation by 2020….

The energy bill will also include a massive biofuels mandate, requiring motor fuel refineries to use increasing amounts of corn-based ethanol and, starting in 2013, increasing amounts of advanced biofuels using other feedstocks. The legislation also contains incentives for greater efficiency in electricity consumption.

Assuming the bill passes the House, it will, of course, need to get 60 votes in the Senate — and a signature from W. Stay tuned.

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