President Obama Announces Tough New Fuel Efficiency Standards

President Obama announced the toughest fuel efficiency regulations that this country has seen, calling the agreement “the single most important step we’ve ever taken as a nation to reduce our dependence on foreign oil.” Cars and light trucks manufactured beginning in the model year 2017 will have to meet a new standard of 54.5 miles per gallon in order to meet a 2025 goal. These stringent standards build upon current standards set to take effect next year, in which vehicles manufactured beginning in the model year 2012 must run at 35.5 miles per gallon, to meet a 2016 goal. The United States began setting goals for fuel efficiency about 40 years ago, and current standards are roughly 27 miles per gallon.

In a speech, the President declared that the new terms will save the American people $2 trillion in fuel costs overall, while saving drivers $8,000 per car. American dependence on foreign oil will decrease by a total of 12 billion barrels and 2.2 million barrels per day – roughly half of the total amount of oil this country imports from the Organization of the Petroleum Exporting Countries (OPEC), he said, and “just as cars will go further on a gallon of gas, our economy will go further on a barrel of oil […] this will help meet the goal that I’ve set for America: reducing our dependence on foreign oil by one-third”. With a decrease in oil use comes a significant drop in carbon emissions, which are largely caused by the transportation industry.

At the forefront of this historic compromise are 13 major auto companies that represent 90 percent of cars sold in the United States, including Michigan-based Ford, General Motors, and Chrysler. Two years ago, these three American auto giants were on the brink of extinction, but now they are leading an effort that could repair their once-struggling businesses and place them at the top of the American auto industry once again.

The fuel efficiency standards, agreed upon by the auto industry as well as Congress members, environmental NGOs and the state of California, will rely on research to develop new technologies to improve the way cars consume fuel. Ron Bloom, Assistant to the President for Manufacturing Policy, and Heather Zichal, Deputy Assistant to the President for Energy Policy, noted that “safety is always paramount” when considering requirements for the auto industry, and expect the growth of fuel-efficient technology to spur a “host of different technologies that will help us achieve those standards and protect consumer choice”, including combustion engines, to uphold the safety standards for cars of all sizes. This exploration of innovative technologies will boost the economy and use of alternative fuel, bring jobs to Americans and support startup businesses with bright, fresh ideas. Zichal and Bloom do not expect the federal government to have to provide funding for the development of these technologies, as the proposal focused on methods that are available and viable.

While Bloom acknowledged that achieving the strict standards will be difficult for automakers, he said, “We don’t apologize for challenging them. Saving the American consumers $1.7 trillion is a worthwhile endeavor. We are confident that the automobile manufacturers will be able to absorb the additional costs and still sell cars for a profit.” American consumers, he argued, are influenced by fuel efficiency and take that factor into heavy consideration when purchasing a vehicle.

Under these improved guidelines, consumers will generally only have to fill up their tanks every two weeks instead of every week, a net savings that will offset any potential rise in vehicle purchasing costs. The new rules likely won’t be officially implemented until next year, but if they are, buyers can expect to see a lower miles-per-gallon estimate on car stickers. Roland Hwang, transportation director for the Natural Resources Defense Council, observed that due to the method of fuel efficiency calculations, the figure customers will see listed at dealerships will likely be around 40 miles per gallon, still almost twice that of the current average of 22 miles per gallon.

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