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New mileage standards aim for less fuel, pollution

By Tom Krisher

Associated Press

Published: Friday, July 29 2011 9:50 p.m. MDT

But by Friday evening, the Republican chairman of the House Committee on Oversight and Government Reform, Rep. Darrell Issa of California, had sent letters to the 13 automobile manufacturers that agreed to the deal saying they should preserve all records because he was launching an investigation. Issa alleges that the new mandate was decided without the input of consumers and Congress and could harm consumers.

"It appears that these actions will have the effect of determining the types of vehicles available to consumers, their use, and other factors otherwise best left to consumer choice," Issa said in the letter, obtained by The Associated Press.

For automakers, particularly the Detroit Three, the deal signaled a turnaround from the days when they resisted boosting fuel economy targets, arguing that consumers would not buy smaller and more efficient cars and that the technology to reduce fuel consumption was too expensive.

That stance has been challenged in recent years by a 2007 energy law that mandated the government evaluate and set new fuel economy targets, by a Supreme Court decision that said the Environmental Protection Agency had the authority to control global warming pollution from vehicles, and by a state — California — that has set stricter emissions standards than the rest of the country.

Mary Nichols, chairman of the California Air Resources Board, said auto companies wanted "one set of cars they could sell anywhere in the U.S." and the changes the deal would bring would meet state targets. "We will accept standards that were announced today as being compliant with California standards through 2025 unless and until there is a change," she said.

A $62 billion taxpayer-funded bailout for GM and Chrysler added to the White House's leverage.

Some environmentalists lauded the agreement Friday but said that manufacturers owed taxpayers a bigger deal after bailing them out.

"An auto industry that owes its survival to taxpayer bailouts ungratefully flouted the public's demand for fuel efficiency and less pollution, fighting for loopholes until the bitter end," said Dan Becker, director of the Safe Climate Campaign.

For consumers, the new requirements are well beyond the gas mileage of all but the most efficient cars on the road today.

By the time the new standards take effect, the government expects gas-electric hybrids to make up about half the lineup of new vehicles, with electric vehicles making up about 10 percent of the fleet.

Currently hybrid and electric vehicles combined amount to less than 3 percent of U.S. vehicle sales, according to J.D. Power and Associates.

They'd also force auto companies to get rid of some less-efficient models as they try to boost gas mileage of their lineups. But that depends on how quickly new technology can be developed. Pickup trucks, which rank as some of the biggest sellers for American automobile companies, get a slight reprieve under the agreement. They will only have to increase fuel economy in the first five years by 3.5 percent. After that time, they will have to match the 5 percent annual increase for cars.

Automakers are far better prepared with a much stronger line up of small cars, as well as hybrid and electric vehicles. General Motors and Nissan are selling mass-market electric vehicles, while Mitsubishi, Ford, Toyota and others are about to enter the market.

Nissan's vice president Scott Becker in a statement said the Obama administration has issued some extremely challenging greenhouse gas reduction and fuel economy improvement targets, but Nissan was "up to the task."

Nissan introduced the LEAF, the world's first and only 100 percent electric car for the mass market, in December 2010. More than 4,000 of the 99 miles-per-gallon vehicles are already on the road.

GM and Ford already have small gasoline-fueled cars that get 40 mpg or better on the highway, and Chrysler will have one next year. Small car sales are up 21 percent so far this year, showing consumer interest is up.

That is perhaps the deal's best selling point.

"It is hard to call higher fuel economy standards job killing when all of the automotive companies support it, and the United Auto Workers support it," said Rep. Ed Markey, D-Mass.

Ron Bloom, the White House's chief negotiator on the deal, said Friday it was "an example of industry starting to lead the parade."

Krisher contributed reporting from Detroit.

Follow Dina Cappiello on Twitter: (at)dinacappiello.

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