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Old 03-13-2002, 21:58   #1 (permalink)
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Automotive news, not just about Ford....

Senate kills big CAFE hike intended to boost fuel economy 50 percent


By HARRY STOFFER
Automotive News

WASHINGTON - The Senate has killed a proposal to boost car and truck fuel economy standards by nearly 50 percent in a decade.

The vote, at noon on Wednesday, followed a furious lobbying effort by car companies, dealers, autoworkers and other industry allies. It also came after a marathon and often-nasty debate among senators.

Sen. John Kerry, D-Mass., principal author of the 50 percent increase, accused automakers and their allies of using lies and scare tactics to defeat his proposal.

Senate Minority Leader Trent Lott, R-Miss., called the defeated proposal "a fuel efficiency number picked out of the sky."

Instead, senators voted 62-38 in favor of an alternative offered by senators from auto-producing states. In the alternative, the National Highway Traffic Safety Administration (NHTSA) would be given deadlines for setting new fuel economy requirements . It also would provide expanded tax credits and other incentives to promote development and sales of hybrid, fuel cell and electric vehicles.

If NHTSA fails in the assignment, Congress would take the job back, said Sen. Carl Levin, D-Mich., a leader of the effort to undo the proposed 50 percent increase in corporate average fuel economy standards (CAFE).

Automakers had warned that a 50 percent increase in fuel economy standards would force them to stop selling many truck models, to close factories and to lay off workers.

"It's incredibly important that we do this the right way," said Sen. Debbie Stabenow, D-Mich., a supporter of the alternative. She said the auto industry, responsible for 6.6 million jobs, is the nation's most important business and must be protected.

Stabenow and other sponsors of the alternative said drastically higher standards would hurt the Big 3 more than import-brand companies and would benefit "foreign manufacturers." The argument was made even though automakers, both U.S.-based and overseas-based, were united against the 50 percent increase.

Stabenow's ally, Sen. Kit Bond, R-Mo., warned that a drastic hike in standards would force families to drive golf-cart-sized vehicles.

The industry-backed alternative replaces the Kerry proposal in a wide-ranging energy bill that remains under consideration on the Senate floor. Some additional fuel economy proposals areyet to be debated. The fate of the broader bill remains unclear.

Senators opposed to sharply higher CAFE had offered some sweeteners to win support for their amendment.

If ultimately enacted, it would also do the following:

Provide hefty tax credits for buyers of hybrid, fuel cell and electric vehicles. They would be bigger than those previously proposed in Congress, and greater than those in President Bush's budget. The credits would be as much as $11,000 for a fuel cell car or truck, $6,000 for an electric vehicleand $5,000 for a gasoline-electric or diesel-electric hybrid.

Require the federal government to buy hybrid-powered vehicles for its own truck fleets.

Expand federal research on diesel engines and boost by 40 percent the federal funding for the government-industry vehicle research program called FreedomCAR.

The industry-backed amendment knocked out of the energy bill a requirement that cars and light trucks average 35 mpg by 2013. Today's vehicles average about 24 mpg. CAFE standards are 27.5 mpg for cars and 20.7 mpg for trucks.

The alternative would give NHTSA 15 months to set new truck standards that would be valid for as long as 15 years, and 24 months to set new car standards, which also would be valid for as long as 15 years.

The agency would have to consider criteria, including technological feasibility, economic impact, safety and employment in the auto industry.

Kerry said the effect of accepting the industry-backed alternative was to create years of further delay in addressing critical issues, including U.S. dependence on imported oil and global warming. In effect, the nation would have no fuel economy standards, he said.

Under existing law, NHTSA is required each year to set trucks standards at the maximum feasible level. NHTSA also believes it has authority to set car standards. Neither truck standards nor car standards have changed more than 0.1 mpg in a decade.
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