Energy bill pushes MPG timeline

WASHINGTON — The groundbreaking deal in Congress to raise mile-per-gallon standards will compel the auto industry to churn out more fuel-efficient vehicles on a faster timeline than the companies wanted, though with flexibility to get the job done.

The auto industry's fleet of new cars, sport-utility vehicles, pickup trucks and vans will have to average 35 mpg by 2020, according to the agreement that congressional negotiators announced late Friday. That compares with the 2008 requirement of 27.5 mpg average for cars and 22.5 mpg for light trucks. It would be the first increase ordered by Congress in three decades.

Majority Democrats plan to include the requirement in broader energy legislation to be debated in the context of $90-per-barrel oil, $3-plus pump prices and growing concerns about climate change. The House plans to begin debate this week.

"It is a major milestone and the first concrete legislation to address global warming," said Sen. Dianne Feinstein, D-Calif.

While Senate Democrats were quick to embrace the compromise, the energy bill may face problems over requirements for nonpublic electric utilities to produce 15 percent of their power from renewable energy sources such as wind or power.

Sen. Pete Domenici, R-N.M., on Saturday said that idea "will make this bill untenable for many in the Senate."

Environmentalists have sought stricter mileage standards for years, saying that is the most effective way to curb greenhouse-gas emissions and oil consumption.

The energy bill will help accelerate plans by automakers to bring more fuel-efficient technologies to conventional engines and alternatives such as gas-electric hybrids and vehicles running on ethanol blends. For the first time, for example, manufacturers will receive credits for building vehicles running on biodiesel fuel.

Domestic automakers and Toyota vehemently opposed a Senate bill approved in June that contained the same mileage requirements and timeline. They warned that the measure would limit the choice of vehicles, threaten jobs and drive up costs.

The companies backed an alternative of 32 mpg to 35 mpg by 2022. At the time, Chrysler executive Tom LaSorda told employees the Senate bill would "add up to a staggering $6,700 — almost a 40 percent increase — to the cost of every Chrysler vehicle."

But the compromise worked out by Rep. John Dingell, D-Mich., House Speaker Nancy Pelosi, D-Calif., and Senate leaders maintains a significant boost in mileage standards while giving the industry more flexibility and certainty as it plans new vehicles.

The proposal would continue separate standards for cars and trucks, extend credits for producing vehicles that run on ethanol blends, and allow automakers to receive separate credits for exceeding the standards and then apply those credits to other model years.