* Auto companies, UAW union on board
* Consumers may shoulder costs in higher car prices
* California plans standards beyond 2016 goals
(Adds comment from California official, paragraphs 18-19)
By John Whitesides
WASHINGTON, May 19 President Barack Obama took
aim at climate-warming greenhouse gases on Tuesday and ordered
the struggling auto industry to make more fuel-efficient cars
under tough new national standards to cut emissions and
increase gas mileage.
Obama said the standards, announced at a White House
ceremony attended by auto industry and union leaders, would
reduce U.S. dependence on foreign oil and give five years of
cost certainty to an industry battling to survive.
"The status quo is no longer acceptable," Obama said in an
announcement that will pressure carmakers to transform and
modernize the industry to produce more efficient vehicles.
"We have done little to increase fuel efficiency of
America's cars and trucks for decades," he said, calling the
standards the start of a transition to a clean energy economy.
Obama has made fighting climate change a priority, and
lawmakers in Congress have begun wrangling over a historic bill
many hope will provide broader guidelines for controlling
greenhouse gas emissions. [ID:nN19427337]
Growing public support for efforts to battle climate change
and the weakened state of the U.S. auto industry, which is
staying afloat through federal bailouts and restructuring at
the government's direction, gave Obama a window of opportunity
to impose the rules.
Criticism of Obama's announcement was limited, and focused
on the higher production costs, the safety concerns created by
producing lighter cars and fears from some observers about
increasing government involvement in the industry.
"The government is now designing our cars. It's out of the
hands of vehicle manufacturers," said auto industry consultant
Under the new standards, U.S. passenger vehicles and light
trucks must average 35.5 miles per gallon (6.62 litres/100km)
by 2016. The current law, approved by the Bush administration,
requires a similar gain by 2020.
Obama said the new standards would save 1.8 billion barrels
of oil over the lifetime of the program -- the equivalent of
taking 58 million cars off the road for a year.
The Environmental Protection Agency would regulate and
reduce tailpipe emissions for the first time under the
The U.S. Congress does not have to approve the standards,
which will be implemented through rules developed by the
Department of Transportation and Environmental Protection
Agency, which could take more than a year to complete.
HIGHER PRICE TAGS FOR CONSUMERS
The plan was praised by automakers, environmentalists and
an array of politicians, but it will mean higher price tags for
consumers. The new program will add about $1,300 to the price
of producing a vehicle.
Obama said car buyers would recoup the money with the lower
fuel costs realized under more efficient mileage standards.
"Over the life of a vehicle, the typical driver would save
about $2,800 by getting better gas mileage," he said.
The plan could cut deeply into voracious U.S. gasoline
demand, dealing another blow to a refining sector hard hit by
recession and bracing for more climate legislation.
The program resolves a long-running dispute between the
government and California, which sought a waiver from federal
law to impose its own tough standards on emissions. That could
have led to a patchwork of different state regulations.
California's top climate change official said America's
most populous state was already planning the next stage of
clean car standards.
"California will be immediately getting to work on what the
standards should be for beyond 2016," Mary Nichols, who chairs
the California Air Resources Board, said in a telephone
interview. She expects "a much more stringent standard."
Governor Jennifer Granholm of Michigan, whose state
includes the capital of the beleaguered auto industry, Detroit,
said the plan would give the industry cost certainty by setting
a uniform national standard.
California Governor Arnold Schwarzenegger, who also
attended the announcement, told reporters the weekend
negotiations on the plan were "very intense."
"Then all of a sudden it all clicked and it came together,"
he said. "It really was a huge battle and the president has
brought everyone together and now we're marching forward in the
The proposal is aimed at cutting climate-warming carbon
emissions, which would fall by 900 million metric tons or more
than 30 percent over the life of the program.
(Additional reporting by John Crawley, Lisa Lambert, Kevin
Krolicki and Peter Henderson; Editing by Peter Cooney)