March 5, 2009 / 12:39 AM / 9 years ago

Obama, auto industry favor single fuel standard

WASHINGTON, March 4 (Reuters) - The Obama administration and automakers favor maintaining a single national standard for fuel efficiency, officials said on Wednesday as a bid by California to set its own requirement revs up.

Separately, Congress is close to setting a June 30 deadline for the Environmental Protection Agency (EPA) to decide whether California can proceed with its politically charged initiative that would improve efficiency by sharply reducing tailpipe emissions.

The provision is included in must-pass spending legislation now before the U.S. Senate. The House of Representatives has already acted on the measure.

President Barack Obama ordered the EPA in January to revisit the California matter after it was thwarted by the Bush administration in 2007.

The state must receive a waiver from federal law to proceed. A public hearing is scheduled for Thursday in Virginia.

The shared administration and industry position on a single standard provides important clarity ahead of the hearing with prominent industry interests and powerful environmental groups at odds over the best way to move forward.

It remains to be seen what approach will prevail nationally, if the Obama administration pursues the course it is leaning toward.

The California law, which is supported by a dozen other states, would require a 30 percent reduction in emissions by 2016. Burning less fuel or burning it more efficiently would improve gasoline mileage, experts say. The law, proponents say, is also designed to speed electric vehicles to market.

A less stringent federal regulation in the works based on vehicle design seeks to satisfy a congressionally ordered fleet average of 35 miles per gallon by 2020. That is a 40 percent increase over current industry performance.

The Transportation Department on Tuesday laid the groundwork for maintaining a long-term single standard, seeking product plans from manufacturers for model years 2012-16.

    Both Obama and industry officials said on Wednesday that a single method would provide necessary certainty for shaping product plans, especially for distressed U.S. manufacturers General Motors Corp (GM.N), Ford Motor Co (F.N) and Chrysler LLC.

    Automakers fear a federal standard based on one criteria and another adopted by California and several other states based on emissions would create a patchwork of laws and regulations that would drive up manufacturing costs at a time of deep industry uncertainty.

    “We share his (Obama’s) goals and are committed to working to help create a national program that provides consistency and certainty for the auto industry and helps us bring cleaner and more fuel efficient vehicles to market,” said Dave McCurdy, the top lobbyist for U.S. and certain overseas manufacturers.

    An Obama administration official said the administration is weighing the single-standard approach as part of its efforts to reshape the U.S. auto industry.

    An administration-led task force is working on turnaround plans with GM and Chrysler, both of which are seeking billions more in bailout funds.

    “A national policy at this point is in the conceptual stage and we do not have specifics we can share given that the conversations are ongoing, “ the official said in a statement. (Reporting by John Crawley; Additional reporting by Jeremy Pelofsky and Jeff Mason; Editing by Richard Chang) ( + 1 202 898 8340)

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