Paving the Way for New Rules on SUV Mileage

The House of Representatives approved legislation Tuesday that could open the door to higher fuel economy standards for gas-gulping sport-utility vehicles.

For the first time since Republicans took control of Congress in 1995, the annual transportation funding bill does not contain a provision prohibiting regulators from raising the miles-per-gallon rules for the popular vehicles.

With polls showing strong public support for higher standards and Republicans under fire over energy policies perceived by some as pro-consumption, supporters of tougher rules expect the bill to win Senate approval and President Bush’s signature.

“Is there movement? Yes,” said David M. Nemtzow, president of the Alliance to Save Energy, a Washington-based coalition of business, consumer, government and environmental advocates. “Is it politically significant? Absolutely.”

Rep. Darrell E. Issa (R-Escondido) said he appreciated “that the auto companies have to be given fair warning. But I think it’s time to give them that warning.”

Auto executives in Detroit oppose any federally mandated increase in fuel economy standards and maintain that consumers don’t favor government restrictions because fuel economy and gasoline prices rank low among their priorities when shopping for vehicles.

“To keep regulating the market isn’t the way to work,” said General Motors Chief Executive G. Richard Wagoner. “Let’s be honest: People have been buying the products they want based on their views of the needs they have for the products.”

Increased fuel economy is “desirable if other vehicle attributes are being met,” added Reg Modlin, director of environmental and energy planning for the Chrysler Group. “But . . . consumers are really more concerned with safety, acceleration, overall performance such as towing, and the overall package.”

Administration officials have said they are open to tougher standards but are awaiting the findings of a congressionally directed study by the National Academy of Sciences--expected to be completed in July--that will examine, among other topics, how tougher standards would affect passenger safety and U.S. auto industry jobs.

Under a 1975 law, passenger cars must meet a “corporate average fuel economy” standard, known as CAFE, of 27.5 miles per gallon. But light trucks--a category that includes SUVs, minivans and pickups--are permitted to meet an average of just 20.7 mpg.

“If the [National Academy of Sciences] panel resolves that CAFE increases are beneficial and they fit within [Bush’s] overall energy policy, I think we will see some increase,” Modlin said. “But will it achieve its objective and decrease our dependence on foreign oil? We think not.”

For their part, U.S. car makers promise fuel economy improvements in light trucks, whether federally mandated or not.

When the CAFE law was enacted, light trucks largely were used for such duties as hauling cargo. But the overall average fuel economy of vehicles for model year 2000 fell to 24 mpg, the lowest since 1980, as SUVs have become increasingly popular in the last decade for ferrying kids and for everyday driving.

Some advocates of tougher standards were encouraged by the House decision not to include the freeze on raising the standards.

“I think the climate is changing,” Sen. Dianne Feinstein (D-Calif.) said Tuesday. She has pushed for tougher standards and cited remarks by Senate Minority Leader Trent Lott (R-Miss.) earlier this week that he is open to a “reasonable” increase in the standards.

Daniel F. Becker, director of the Sierra Club’s global warming and energy program, said: “There will be an increase. The question is how high it will be. Even conservative, anti-environmental Republicans are saying, ‘We need to do something.’ ”

Others are more skeptical, suggesting that the auto industry didn’t see a need to lobby for the freeze with a man who is regarded as friendly to business now occupying the Oval Office.

Industry officials contend that higher standards would increase the cost and reduce the performance of SUVs.

But makers of light trucks say they will be able to boost fuel economy to an average of 22.5 mpg by 2004 and 26 mpg by 2009 with a “reasonable effort,” according to a survey of auto makers in North America published in March 2000 by the Office for the Study of Automotive Transportation at the University of Michigan.

The auto makers will be able to increase the average mileage of passenger cars to 29 mpg by 2004 and 32 mpg by 2009, the same study found.

“So if truck CAFE gets raised to 22 or 23 mpg, they should be fine,” said Michael Flynn, director of the University of Michigan transportation office.

Hybrid vehicles, which combine electric motors with standard gasoline or diesel engines, dramatically increase mileage. Honda and Toyota already sell hybrid passenger cars in the U.S., and the technology could play a significant role in truck fuel economy for the Big Three auto makers in the coming years.

Ford plans a hybrid propulsion system in its Escape compact SUV in 2003 that gets nearly 40 mpg. Chrysler says it will sell a hybrid Durango SUV in 2003 and a hybrid Dodge Ram pickup in 2004. GM plans to begin selling several hybrid pickups in 2004, as well as a new class of hybrid SUVs, minivans, “crossover” vehicles and large sedans for the 2005 model year.

But some critics doubt that hybrids, with their added engineering costs to auto makers, will be as attractive to owners of large trucks, where brawny eight-cylinder engines rule.

“I don’t think they can sell enough” to significantly affect their average fuel economy, said Steven Gregerson, a partner in the Automotive Consulting Group in Ann Arbor, Mich.

“It’s really untried technology, especially in vehicles that size,” Gregerson said. “People aren’t going to want to give up their higher horsepower engines. It’s going to be a tremendous challenge to improve fuel economy, particularly in lieu of not trading off big profits.”

Tougher fuel economy standards for SUVs have been blocked by an unusual coalition: the auto industry, Republicans wary of regulations, labor unions and some Democrats from car-producing states.

Rep. John W. Olver (D-Mass.), a leading advocate of tougher standards, said he does not believe the administration will establish higher standards unless prodded.

“They’ve been hit hard on their environmental policy,” he said. “They’re being hit again and again on it, and they’re getting pretty sensitive.”

And a number of moderate GOP lawmakers are in favor of higher standards.

Some members of Congress don’t plan to wait for the administration to act: Feinstein and Sen. Olympia J. Snowe (R-Maine) are proposing legislation that would require SUVs to meet the same fuel economy standards by 2007 that passengers cars meet today.

But Chrysler’s Modlin called that goal unrealistic: “That’s something the marketplace can’t tolerate. We just can’t get there.”

Simon reported from Washington and Jones from Detroit.

*

RELATED STORY

Smog battle: AQMD will help car buyers find clean-air options. C2