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Democrats reach deal on auto fuel efficiency

Congressional Democrats reached a compromise late Friday to boost automobile fuel economy by 40 percent, clearing the way for a House vote probably next week on an energy bill.
/ Source: The Associated Press

Congressional Democrats reached a compromise late Friday to boost automobile fuel economy by 40 percent, clearing the way for a House vote probably next week on an energy bill that Democratic leaders would like to send to President Bush before Christmas.

The agreement came after House Speaker Nancy Pelosi reached an accord with Rep. John Dingell, D-Mich., a longtime protector of the auto industry that dominates his home state, to ease the impact of the new fuel economy requirements.

“A compromise has been reached on automobile fuel efficiency standards,” Dingell announced in a statement.

Automakers would be required to meet an industrywide average of 35 miles per gallon for cars and light trucks, including SUVs, by 2020, the first increase by Congress in car fuel efficiency in 32 years.

With oil prices hovering near $90 a barrel and gasoline above $3 a gallon, Democrats have been eager to sent Bush a package of new energy measures.

But Democratic leaders were stymied over disagreement on the auto fuel efficiency issues as Dingell, the longest-serving member of the House and chairman of the Energy and Commerce Committee, insisted on some provisions to ease the transition for automakers.

Details of deal
Under the agreement, the ability of carmakers to use production of so-called flex-fuel vehicles that run on 85 percent ethanol, would be extended to 2020 and more flexibility would be given in improving fuel efficiency for SUVs and pickup trucks, although overall the industry must achieve 35 mpg average counting all vehicles.

Pelosi, D-Calif., said in a statement that the auto efficiency increases — similar to what already has passed the Senate — “will serve as the cornerstone” of the energy bill she intends to bring up for a vote next week.

She said the bill also will include a ramp up in the use of ethanol and other biofuels and a requirement for nonpublic electric utilities to use a minimum amount of renewable energy such as wind and solar to produce their power.

While details of those provisions were still being worked out, aides said the ethanol provision was expected to mirror Senate requirements for use of 36 billion gallons of ethanol a year by 2022, a sevenfold increase over today’s productions.

Power companies would have to produce 15 percent of their electricity from renewable energy, aides close to the discussions said.

GOP filibuster expected
Both the Senate and House approved separate energy bills last summer, but Democratic leaders have struggled for weeks to try to work out a compromise acceptable to both chambers — and garner the 60 votes needed to survive a sure filibuster in the Senate.

House Republicans have called the legislation a “non-energy bill” because, they said, it ignores any measures to promote domestic production of oil, natural gas or increased use of coal.

But Pelosi has said its aim is to turn away from fossil fuels toward development of renewable fuels and place greater emphasis on spurring energy efficiency and conservation.

She said the auto fuel economy provisions represent a “landmark ... that will offer the automobile industry the certainty it needs, while offering flexibility to automakers and ensuring we keep American manufacturing jobs and continued domestic production of smaller vehicles.”

The agreement on vehicle fuel economy came after days of tense discussions between Pelosi and Dingell, a staunch defender of the auto industry, who had pressed for concessions to help the industry. Pelosi agreed to a number of Dingell’s demands but stood firm on the overall requirement of 35 mpg, phased in over the next 13 years.

“The agreement reached today prescribes standards that are both aggressive and attainable,” said Dingell. “We have achieved consensus on several provisions that provide critical environmental safeguards without jeopardizing American jobs.”

Manufacturers currently have to meet a fleet average of 27.5 mpg for cars — a level that has not increased since 1989 — and 22 mpg for SUVs, passenger vans and pickups.

Meanwhile it became increasingly likely — though not yet certain — that Democratic leaders will abandon attempts to repeal nearly $16 billion in tax breaks to the oil industry as had been approved by the House earlier this year.

It remained unclear Friday whether some, more limited tax provisions aimed at ensuring extensions of tax credits and incentives for renewable fuels development would be included.