Obama Makes 54.5 MPG Rule Official; Engineers, Designers Wary

The Obama Admin. today releases a new corporate average fuel economy rule of 54.5 mpg (4.3 L/100 km) by 2025, and while auto executives support the target, skepticism exists among the rank-and-file tasked with meeting the bogey.

United Auto Workers President Bob King says today’s announcement demonstrates the White House’s willingness to listen to auto makers.

“No industry is doing more on these issues,” King says in a statement ahead of the final rules, noting investment to meet future CAFE already has begun.

“There is business opportunity in meeting consumer demand for relief at the pump.” General Motors CEO Dan Akerson gave an important thumbs-up for the new mandate earlier this week during kickoff ceremonies for the 2011 UAW contract negotiations in Detroit.

“We support our societal goals of fuel efficiency and a reduced carbon footprint,” Akerson told journalists.

The auto maker adds today that the new rules “provide regulatory certainty” for the industry.

Akerson and King are among 250 industry executives, environmental leaders, lawmakers and regulators joining Obama for the announcement at the Washington Convention Center, site of the annual Washington auto show.

“We’ve set an aggressive target and the companies are stepping up to the plate,” Obama says. “By 2025, the average fuel economy of their vehicles will nearly double.”

Obama calls 2025 CAFE rules “something lasting for our country.”

The rules step up beginning in 2017 and equate to a carbon-dioxide emissions level in 2025 of 163 grams per mile, according to the Union of Concerned Scientists.

Auto maker fleets currently are marching to a 2016 CAFE requirement of 35.5 mpg (6.6 L/100 km) by 2016, a target estabished in 2009.

The new standard equals an increase in auto maker fleet fuel efficiency of 5% annually for passenger cars and 3.5% annually for light trucks in the first five years and by 5% every four years after until 2025.

Regulators say the slower phase-in for trucks, for which auto makers reportedly lobbied aggressively, accounts for some “unique challenges.”

Auto makers also won a “mid-term” evaluation of the rules to examine their progress. In addition, California will adhere to the national rule.

The state has threatened to break away from the federal regulations to implement stricter rules within its boundaries.

The National High Traffic Safety Admin. and Environmental Protection Agency will continue working on a joint rule-making and release a final proposal for public comment by the end of September.

Industry executives may outwardly support the 2025 rules, but a Ward’s survey scheduled for detailed release Tuesday shows 1,100 rank-and-file engineers and designers currently working at auto makers and suppliers expressing serious doubt over meeting the targets without hurting vehicle safety, size and cost.

Disputing claims by environmental groups, only one in four automotive engineers and designers agreed that Obama Administration’s originally proposed fleet average of 56.2 mpg (4.1 L/100 km) by 2025 could be met with currently available technologies.

Less than one of 10 respondents thought new fuel economy rules were being drafted with the idea of accommodating future safety rules, which will mandate significantly better crashworthiness and likely add weight to future vehicles.

“It is a MAJOR STRETCH, regardless of what the Union of Concerned Scientists says,” one engineer writes in a survey response.

A whopping 77% of respondents agreed that the 56.2 mpg bogey “will fundamentally change how vehicles are manufactured in the U.S.”

Ward’s latest monthly analysis of consumer purchases shows more buyers picking cars, trucks and cross/utility vehicles with greater fuel efficiency.

In the first half of 2011, sales of vehicles achieving between 25 mpg and 30 mpg (9.4-7.8 L/100 km) rose 4% over the same period last year. Sales of vehicles getting greater than 30 mpg are up 22.4% vs. like-2010.

Sales of vehicles averaging 15 mpg (15.7 L/100 km) fell 11.2% and those achieving between 15 mpg and 20 mpg (11.8 L/100 km) declined 3.8% Sales of vehicles averaging between 20 mpg and 25 mpg fell 0.4%.

The UCS estimates the 2025 CAFE rules will save 1.5 million barrels of oil per day, or about 23 billion gallons (87.1 billion L) of gasoline annually by 2030 and trim CO2 emissions 280 million tons (254 million tonnes).

The group expects consumer to save $50 million at the pump in 2030, after adjusting for technology costs.

The final rules for 2025 also likely will include incentives for auto makers to make advanced technology vehicles such as hybrids and electric vehicles, including special treatments for trucks, on top of encouraging use of more environmentally friendly air-conditioning refrigerants.

Auto makers also could receive incentives for the use of compressed natural gas and could trade credits for emissions savings or carry forward unused credits from the 2016 rules as far as 2021.

During his remarks, Obama singles out GM, Ford and Chrysler for their progress since two of three auto makers went through bankruptcy in 2009. He also touts the industry’s cooperation on the new CAFE rules as an example to lawmakers locked in a partisan struggle over raising the debt ceiling of “doing something lasting for this country.”

– with Drew Winter

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