Obama Wants 35.5 MPG By 2016

WASHINGTON (AP) - President Barack Obama plans to propose the
first-ever national emission limits for cars and trucks as well as
average mileage requirements of 35.5 miles per gallon by 2016 - all
costing consumers an extra $1,300 per vehicle.

Obama's plan couples for the first time pollution reduction from
vehicle tailpipes with increased efficiency on the road. It would
save 1.8 billion barrels of oil through 2016 and would be the
environmental equivalent to taking 177 million cars off the road,
senior administration officials said Monday night.

The plan also would effectively end a feud between automakers
and statehouses over emission standards - with the states coming
out on top but the automakers getting a single national standard
and more time to make the changes.

The plan still must clear regulatory hurdles at the
Environmental Protection Agency and the Transportation Department.
The administration officials spoke on the condition of anonymity
because the formal announcement by Obama was scheduled for Tuesday.

New vehicles would be 30 percent cleaner and more fuel efficient
by the end of the program, according to officials familiar with the
administration's discussions. The officials also spoke on condition
of anonymity because the formal announcement had not been made.

Administration officials said consumers were going to pay an
extra $700 for mileage standards that had already been approved.
The comprehensive Obama plan would add another $600 to the price of
a vehicle, a senior administration official said.

The extra miles would come at roughly a 5 percent increase each
year. By the time the plan takes full effect, at the end of 2016,
new vehicles would cost an extra $1,300.

The cost would be recovered through savings at the pump for
consumers who choose a standard 60-month car loan if gas prices
follow government projections, according to one official.

In a battle over emission standards, California, 13 other states
and the District of Columbia have urged the federal government to
let them enact more stringent standards than the federal
government's requirements. The states' regulations would cut
greenhouse gas emissions by 30 percent in new cars and trucks by
2016 - the benchmark Obama planned to unveil for vehicles built in
model years 2012 and beyond.

The Obama plan gives the states essentially what they sought and
more, although the buildup is slower than the states sought. In
exchange, though, cash-strapped states such as California would not
have to develop their own standards and enforcement plan. Instead,
they can rely on federal tax dollars to monitor the environment.

A 2007 energy law requires carmakers to meet at least 35 mpg by
2020, a 40 percent increase over the current standard of about 25
mpg. Passenger car requirements have remained unchanged at 27.5 mpg since 1985, drawing complaints from environmental groups that the
government has been slow to push automakers to produce more
fuel-efficient vehicles.

The auto industry will be required to ramp up production of more
fuel efficient vehicles on a much tighter timeline than originally
envisioned. It will be costly; the Transportation Department last
year estimated that requiring the industry to meet 31.6 mpg by 2015
would cost nearly $47 billion.

But industry officials - many of whom are running companies on
emergency taxpayer dollars - said Obama's plan would help them
because they would not face multiple emissions requirements and
would have more certainty as they develop their vehicles for the
next decade.

"For us, that clarity, not having to address a patchwork of
conflicting laws and regulations across our country, is a
significant win," said David McCurdy, a former Oklahoma
congressman who leads the Alliance of Automobile Manufacturers, a
trade group which represents 11 vehicle manufacturers.

Auto executives, including General Motors Corps. CEO Fritz
Henderson, and executives from Ford Motor Co., Toyota Motor Corp.,
Honda Motor Co., Daimler AG and others planned to attend the White
House event. United Auto Workers President Ron Gettelfinger also
planned to attend.

Henderson said the automaker, which faces a June 1 deadline by
which it may be forced to file bankruptcy, was "fully committed"
to the administration's approach. His company and Chrysler LLC have
received billions in government loans during a dramatic downturn in
car sales and weakened economy.

Toyota Motor Sales USA President James Lentz also issued a
statement in support of the single benchmark.

California Gov. Arnold Schwarzenegger, a Republican, praised the
move, which allows him to declare victory on policy and dodge a
tricky budget question on how to pay for it.

"Today, we're seeing what happens when California leads on
energy and the environment and doesn't waiver, doesn't get bogged
down, doesn't let obstacles get in the way," Schwarzenegger said.

It also provides a reason for Michigan Gov. Jennifer Granholm, a
Democrat who is being considered for the Supreme Court vacancy, to
visit the White House. Obama spokesman Robert Gibbs said Granholm's
visit was primarily for the autos event but wouldn't comment if she
would meet with Obama about the soon-to-be-vacant court position.

A March 2008 decision prevents states from setting their own
limits on greenhouse gas emissions from automobiles, but Obama has
ordered the EPA to reconsider the ruling.

The EPA was already working toward establishing federal
greenhouse gas emissions standards for new motor vehicles when it
made a preliminary determination in April that six greenhouse gases
- four of which are released from automobiles - endanger human
health and welfare.

Before the new Obama proposals would even have a chance at being
implemented, the EPA would have to approve those findings. Hearings
began on Monday.

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