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US Senator Proposes Higher Auto Mileage Standards January 5, 2007

Posted by notapundit in Congress, Politics, US News.

WASHINGTON (Dow Jones)–U.S. Senator Ted Stevens, R-Alaska, late Thursday introduced a bill to raise auto fuel efficiency standards from the current 27.5 miles a gallon to 40 miles per gallon by 2017.

Stevens, vice-chairman of the Senate Commerce, Science and Transportation Committee, said an increase in Corporate Average Fuel Economy Standards, along with more domestic petroleum production, would help the U.S. wean itself off a dependency on foreign energy supplies.

An official at Senator Barack Obama’s office, D-Ill., later said Obama would next week reintroduce the Fuel Economy Reform Act, a bipartisan bill co-led by Sen. Richard Lugar, R-Ind., that seeks to raise fuel economy standards by one mile a gallon every year.

Lawmakers, lobbyists and high-profile advisory councils have said the U.S.’s dependence on foreign supplies, particularly from unstable countries, not only raises security issues, but also undercuts the U.S.’s foreign policy leverage.

Stevens pointed to U.S. imports of around 11 million barrels of crude oil a day compared with five million a day of domestic output. Obama’s office said last year that his proposal would cut gasoline consumption by 500 billion gallons and 13.1 million barrels of oil by 2028.

“The savings achieved by increasing fuel economy standards for the entire U.S. passenger vehicle fleet is essential if we are to become independent of foreign oil,” Stevens said.

Obama’s proposal would also offer incentives for domestic car manufacturers to develop more fuel-efficient vehicles by providing tax incentives for companies to retool parts and assembly plants. He said the inclusion would strengthen the U.S. auto industry by allowing it to compete with foreign hybrid, E-85 and other fuel-efficient vehicles.

The bipartisan bill also proposes lifting the current cap on tax credits for the purchase of fuel-efficient vehicles.

Stevens’ bill proposes a voluntary greenhouse gas emissions trading system – which would allow any emitting business to buy or sell the right to pollute – in an effort to cut greenhouse gasses.

Industry experts said Stevens’ and Obama’s bills create the groundwork for expected debate on the best comprehensive strategy for the country to increase energy efficiency, reduce foreign imports and address concerns about climate change.

“People are laying down markers to try and establish themselves in the debate so that once the ball does start rolling…perhaps one of these bills gets gobbled up into the larger bill” that the Democrats are seeking to develop, said Frank Maisano, an energy industry lobbyist at Bracewell & Giuliani.

Earlier this week, both House leader Nancy Pelosi, D-Calif., and Senate leader Harry Reid, D-Nev., said they planned to work on major energy legislation in the early weeks of the new, Democrat-controlled Congress.

Reid said in his opening speech Thursday that his bill, which is yet to be detailed, would be “an effort to begin to solve the energy crisis,” and would “take an aggressive approach to reducing America’s dependence on oil, especially foreign oil, and putting more advanced technologies in the hands of consumers.”

Maisano said much of the new energy policy proposals that will be seen in the opening weeks of the new Congress – what he termed “investigatory” legislation – will about setting the parameters of the debate, finding out what is practically and economically feasible.

Although President George W. Bush has indicated he would be willing to consider moderate raises to Corporate Average Fuel Economy standards, a key obstacle may be Rep. John Dingell, D-Mich., who is chairman of the House Energy and Commerce Committee and a staunch defender of automaker’s concerns. Dingell has previously opposed higher CAFE standards.

By Ian Talley, Dow Jones Newswires


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