Obama to unveil big increase in required mpg

Obama to unveil big increase in required mpg
Change driven by 30 percent cut in CO2; will cost $1,300 per vehicle

Lucy Nicholson / Reuters file
California's push for cuts in smog and greenhouse gas emissions stems from congested cities like Los Angeles. That push was also the driving force behind a new federal standard worked up by the Obama administration.

New standards
May 19: NBC’s Savannah Guthrie reports on the higher mileage and lower emissions standards.
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updated 32 minutes ago
WASHINGTON - Determined to reduce new vehicle carbon emissions by 30 percent, President Barack Obama on Tuesday is announcing that automakers will have to improve car and light truck mileage by that much starting in 2016.

The new requirement is estimated to cost consumers an extra $1,300 per vehicle, but drivers will be saving at the pump. Moreover, the increased miles per gallon should save 1.8 billion barrels of oil through 2016 — the environmental equivalent to taking 177 million cars off the road, senior administration officials said Monday night.

It also marks the first time federal vehicle standards require cuts in carbon dioxide and other greenhouse gases tied to global warming.

While the 30 percent increase translates to a 35.5 mpg average for both cars and light trucks, the percentage increase in cars would be greater, rising from the current 27.5 mpg standard to 39 mpg starting in 2016. The average for light trucks would rise from 24 mpg to 30 mpg.

California, 13 other states and the District of Columbia had earlier urged the Bush administration to let them enact rules to cut vehicle greenhouse gas emissions by 30 percent. The Bush administration blocked the request and fought a lawsuit, but Obama has decided to adopt key elements of that strategy.

Will phase in new standards
The California program essentially requires new cars to eventually get 42 mpg. But administration officials later noted that their plan sets a 39-mpg benchmark.

Administration sources noted that while a 2007 federal law requires a 30 percent cut by 2020, Obama's plan steps that up by four years. The requirement will gradually phase in, starting with 2011 vehicle models.

Industry gets road map
May 18: CNBC’s Phil LeBeau says automakers will have to squeeze more out of each engine.


The plan also would effectively end a feud between automakers and statehouses over emission standards — with the states coming out on top but the automakers getting a single national standard and more time to make the changes.

Sen. Barbara Boxer, a California Democrat and chair of the Senate Environment and Public Works Committee, thanked the Obama administration for bringing together "the federal government, the State of California, and the auto industry behind new national automobile emissions standards that follow California’s lead.

"This is good news for all of us who have fought long and hard to reduce global warming pollution, create clean energy jobs, and reduce our dangerous dependence on foreign oil," she added.

Environmentalists also praised the move. Carl Pope, executive director of the Sierra Club, called it "one of the most significant efforts undertaken by any president, ever, to end our addiction to oil and seriously slash our global warming emissions."

Daniel Weiss, director of climate strategy at the Center for American Progress, described it as "a triple play: It will help move America off foreign oil, save families money and spur American businesses to take the lead in developing the job-creating, clean-energy technologies of the future."

The Detroit News reported that automakers were on board with the new rule because of that, and because they worked with the administration on creating a timeline for the transition.

The new federal rule would also prompt automakers to drop their lawsuit. Two car companies that have been part of the litigation, General Motors Corp. and Chrysler LLC, have received billions in government loans during a plunge in car sales amid a weakened economy.

Top automaker executives are expected to attend the Tuesday announcement, The Detroit News said, as are Michigan Gov. Jennifer Granholm and California Gov. Arnold Schwarzenegger.