Sunday, March 8, 2009

White House Favors National Fuel Standard

The saga continues. During the Bush administration California passed a law that would require a 30% reduction in emissions by 2016. The idea was to encourage burning of less fuel or burning it more efficiently, whouch would improve gasoline mileage and reduce emissions. The law would also speed the entry of electric vehicles into the marketplace. The overall goal is reduce CO2 emissions that contribute to global warming and climate change.

But the California law requires a waiver from federal law to proceed. EPA during the Bush administration refused to grant that waiver and the newly installed Obama administration instructed EPA to rereview the waiver application. Many thought this would mean that the waiver would be granted and California could proceed.

As always, however, the issue is more complicated than the oversimplified picture ideologues in various camps would have you believe. In fact, if California proceeds it is likely to be followed by about a dozen other states. But many states would not follow suit. This would result in a patchwork of emissions standards that makes it very difficult for manufacturers to adjust their practices. It is especially difficult for the auto industry, which as we all know is undergoing some trying times.

Meanwhile, there is a less stringent federal regulation in the works that would stimulate the vehicle design changes needed to satisfy a congressionally ordered fleet average of 35 miles per gallon by 2010. That amounts to about a 40% improvement over current industry performance. Both President Obama and auto industry representatives indicated this past week that a single national standard for fuel efficiency would present a more manageable system. The goal would be to address both California's desire for more stringent standards and the need for consistent standards across the distribution area. Otherwise there is the potential of having to produce cars meeting different standards depending on where they are shipped (or driven post consumer purchase as individuals relocate around the country).

Congress, EPA, the President, and industry are all contributing to the debate. After the Congressional hearing last week it was still unclear which direction legislation would go, though the single standard seems a more efficient way to address the issue.

No comments: