U.S. set to propose new auto fuel, emissions rules

Mon Sep 27, 2010 4:14pm EDT

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* Plan would start with 2017 model year through 2025

* Proposal would recommend average targets

* Impact of electric vehicles unknown

By John Crawley and Tom Doggett

WASHINGTON, Sept 27 (Reuters) - The Obama administration this week will propose new fuel efficiency and emissions requirements for cars and light trucks for model years 2017 and beyond.

The plan, a centerpiece of President Barack Obama's energy agenda geared toward reducing oil imports, is under review by the White House budget office. It is due on Thursday, but could be released sooner,

Leading environmental groups have called on the administration to set a target of 60 miles per gallon by 2025 but officials have said that is unlikely.

Environmental and auto industry experts close to the process believe transportation and environmental regulators will propose a yearly average increase ranging from 3 percent to 6 percent. The 60 mpg figure would require a roughly 6 percent annual improvement.

The administration is expected to take pains not to be prescriptive, but will spell out its aims for more aggressive gains than industry is accustomed to achieving.

U.S. passenger vehicles emit about 20 percent of the nation's carbon emissions and consume about 44 percent of its oil, figures show.

Environmental groups and scientists want the United States to cut oil dependence nearly 50 billion gallons annually and carbon pollution more than 500 metric tons per year by 2030.

Standards imposed last year require automakers to achieve 35.5 mpg by 2016, up 42 percent from current levels.

The Consumer Federation of America, along with leading environmental and scientific groups, wrote President Obama last week urging his administration to raise vehicle fuel efficiency requirements to 60 mpg by 2025.

If the 60 mpg standard were in place now, U.S. gasoline consumption would fall by roughly half to 4.5 million barrels a day this year, or 1.6 billion barrels annually, according to CFA Director of Research Mark Cooper. One barrel holds 42 gallons.

Cooper also said other countries would benefit from a higher U.S. vehicle fuel standard, as America's gasoline consumption accounts for 10 percent of global petroleum demand.

"Gasoline policy is a huge important part not only of U.S. energy policy, but of global energy policy," Cooper said.

The rulmaking will undergo an intense period of public comment and is not expected to be finalized for some time. Rules must be in place at least 18 months before the start of a model year.

Automotive experts and scientists say the efficiency targets under consideration can be achieved with lighter vehicle construction, cleaner burning gasoline engines and better performing transmission systems.

Many cars, particularly those made by Japanese companies, already meet or exceed the U.S. 2016 standard.

A big unknown is whether the public will embrace electric vehicles, which will receive a "0" emissions rating from the government during their introduction to the market. The most fuel efficient vehicles on the road today, gasoline/electric hybrids, represent only a fraction of retail sales.

General Motors Co GM.UL, which is government-owned, has placed large bets on electric cars. Its Chevy Volt is due out later this year. (Editing by David Gregorio)

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