REUTERS UPDATE 2-US Senate panel sets 35 mpg auto standard by 2020 [GYDCDJT]
(Adds details of bill, industry position)
By John Crawley
WASHINGTON, May 8 (Reuters) - A U.S. Senate committee approved a bill on Tuesday that would make automakers sharply boost the fuel efficiency of vehicles to help cut American dependence on imported oil by the end of the next decade.
But two senior Republicans said the plan, the first of its kind approved by the Commerce Committee since the early 1990s, was unfair to struggling U.S.-based auto companies that depend on sales of less efficient sport utility vehicles and pickups.
"We need to make sure we are fair across the board to all manufacturers. There are some inherent disadvantages, especially on the truck issue," said Sen. Trent Lott of Mississippi.
The proposal would require that the nation's fleet of passenger cars and light trucks -- SUVs, minivans and pickups -- improve fuel efficiency by 4 percent annually beginning in 2011 and average 35 miles per gallon by 2020.
Four percent gains would be expected annually after that but no long-term target was set. The Transportation Department would set mileage formulas for individual vehicle classes, based on weight and size.
Momentum has been building in Congress for lawmakers to respond to soaring gas prices -- over $3 a gallon in some areas -- and address U.S. dependence on imported oil, especially from the volatile Middle East.
Environmental and consumer groups, as well as some powerful lawmakers in the Democratic-controlled Congress, say reducing automobile fuel use is the quickest and most dramatic way to cut fuel use.
Gasoline demand accounts for nearly half of the average daily U.S. consumption of 20.9 million barrels of oil. The Senate bill, proponents say, would save 2.1 million barrels of gasoline and other auto fuel per day by 2025. That is roughly the amount of refined products the U.S. imports now.
The measure, Democrats estimate, would also reduce tailpipe emissions by 18 percent.
Sen. Ted Stevens of Alaska, the ranking Republican on the commerce panel and a former chairman, said senators worked to avoid hurting domestic manufacturers but said the final product was too rigid -- a chief fear of the industry.
However, Sen. Daniel Inouye, the Commerce Committee chairman, said the proposal was not perfect but "we've reached a stage where most parties would say this is fair."
Inouye said the full Senate could take up the bill in June.
Light trucks must get 24 mpg by 2011 while cars must currently average 27.5 mpg. The truck standard was changed last year. The passenger car requirement has not been updated for nearly 20 years.
The U.S. House of Representatives Energy and Commerce Committee is working on a similar bill, which could emphasize alternative fuels over straight savings via the federal Corporate Average Fuel Economy (CAFE) program, the road taken by the Senate.
Major auto manufacturers call the Senate plan unworkable, saying the Transportation Department estimates compliance costs alone could exceed $114 billion before the next decade is out.
Domestic giants like General Motors Corp. <GM.N>, Ford Motor Co. <F.N>, and DaimlerChrysler AG's Chrysler Group <DCXGn.DE> would bear the brunt of those costs as their fleet mix is weighted toward SUVs, pickups and minivans, which get far lower gas mileage than popular sedans made by Japanese rivals like Toyota Motor Corp. <7203.T>.
But big Asian manufacturers also have concerns with the legislation since they are stepping up production of bigger SUVs and pickups.
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08May07 19:33 GMT
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