New Fuel Standards Nearly Double Car Efficiency

The White House announced new regulations that should save Americans money and cut carbon emissions.
by | August 28, 2012

Automakers will be required to manufacture vehicles that have an average fuel efficiency of 54.5 miles per gallon -- nearly double the fuel efficiency of today's vehicles -- by 2025 under new rules announced by the Obama administration Tuesday afternoon.

The White House projects that the standards will save the average American family $8,000 over the lifetime of a new vehicle, but critics argue that the new regulations could increase the price of new vehicles.

"Today is a monumental day for the American people," Transportation Secretary Ray LaHood said during a press call today. "Everyone wins when we reduce fuel use and carbon emissions."

The change comes a year after the Obama administration proposed the new standards -- which will apply to cars and light trucks -- as a way to cut down on how much Americans pay at the pump, make the country less dependent on oil, and reduce greenhouse gas emissions.

Environmental Protection Agency Administrator Lisa P. Jackson told reporters the new standards will likely do more to reduce greenhouse gas emissions than any action previously taken by any administration. When Obama took office, fuel economy standards for passenger cars had been unchanged since 1985.

Thirteen major automakers expressed support for the new standards, which the White House touted as a way to spur innovation as they work to develop technologies to comply with the new regulations.

The new standards cover vehicles manufactured in model years 2017 to 2025, gradually ramping up the miles-per-gallon requirements each year. It's the second long-term increase in fuel efficiency mandated under the administration. In 2010, Obama announced new requirements through 2016 that would eventually increase efficiency to 35.5 mpg.

Despite support from many automakers and environmental groups, critics worry about how the deal was made and the cost to consumers.

House Oversight Committee Chair Darrell Issa accused the administration of failing to act transparently as it developed the rules and negotiated with automakers. Earlier this month, his committee staff compiled a report criticizing the process by which the administration "strong-armed auto manufacturers at the expense of consumer choice, safety, and affordability."

The report raises questions about the cost to consumers of new vehicles that will have to incorporate the latest technology to improve fuel efficiency. The report cites an email between officials with General Motors -- who agreed to the deal -- saying that the cost of vehicles to both consumers and automakers "was clearly not a significant concern of the regulators." The report also says that the administration is overly optimistic about the speed at which new technologies will be available.

The EPA's Jackson told reporters that, "in every scenario we've run," the savings from lower fuel costs would "more than make up for any increase in the cost of an automobile."

Some critics have also pointed out safety concerns with the new rules. Jeremy Anwyl, vice president of automotive news publisher Edmunds.com, writes that fuel efficiency is achieved by reducing vehicle weight -- but larger, heavier vehicles tend to be safer. He predicted traffic fatalities would increase as a result of the efficiency push. "When we want higher mileage and fewer fatalities and injuries, we are pulling in opposite directions," he wrote last year.

Administration officials say manufacturers can meet the new requirements without sacrificing safety.

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