US govs warn against overreaching on fuel standard

Thu Jun 30, 2011 10:05am EDT

* Govs warn vs "overreaching" for 2017-2025 fuel standard

* 56.2 miles per gallon standard reportedly being weighed

* 2010 standard was 29.2 mpg

DETROIT, June 30 (Reuters) - Fifteen U.S. state governors urged federal regulators to take jobs and the weak economy into account when drafting new fuel economy standards for 2017 through 2025, warning against "overreaching" when setting the new miles-per-gallon rate.

The governors, all of whom are Republicans and most of whom represent states with auto plants, warned U.S. Department of Transportation Secretary Ray LaHood and Environmental Protection Agency administrator Lisa Jackson to set "sensible" standards that don't hurt the "fragile recovery."

While 2017 and beyond may be far off, automakers would have to adjust plans and engineering to account for standards that were higher than they expected or wanted.

"If fuel economy standards increase too quickly, resulting in more expensive vehicles, many consumers can be expected to hold onto their older vehicles longer and defer buying a new car, which could put auto jobs across the country at risk and delay compliance with federal air quality standards," the governors said in a Wednesday letter.

"Affordability, customer choice and job preservation is as much a priority as raising fuel economy," they added.

The push to boost fuel efficiency has forced automakers to redesign their vehicles by adopting more fuel-efficient designs and using lighter but more expensive materials. These efforts are likely to raise the cost of vehicles and may pinch automakers' margins. [ID:nN26144187]

This week alone, federal officials have had three meetings with automakers about upcoming standards for corporate average fuel efficiency (CAFE), LaHood told reporters on Wednesday at a General Motors Co (GM.N) pick-up truck assembly plant in Flint, Michigan. [ID:nN1E75S1A5]

In 2009, the Obama administration raised CAFE standards, requiring automakers to boost the average fuel efficiency of their vehicles to 35.5 miles per gallon by 2016. The administration is reportedly considering lifting the standard to 56.2 mpg for the 2017 to 2025 time period. [ID:nN1E75P055]

LaHood declined to confirm that figure. The Obama administration has said it is targeting a range between 47 mpg and 62 mpg. The CAFE standard in 2010 was 29.2 mpg.[ID:nN01278160]

The governors from Alabama, Indiana, Kansas, Kentucky, Michigan, Mississippi, Ohio, South Carolina and Tennessee -- all states with auto assembly plants -- said transportation is a "critical component of our economic vitality."

The governors emphasized that new technologies should continue to support increases in fuel economy and warned against "overreaching regulations."

Also signing were the governors of Idaho, Iowa, Maine, Nevada, Utah and Virginia. (Reporting by Ben Klayman; Editing by Derek Caney)

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