Obama's Waiver Order May Benefit Auto Makers

President Barack Obama's executive order directing newly appointed Environmental Protection Agency Administrator Lisa Jackson to revisit a request by California to regulate tailpipe emissions may mark a win of sorts for struggling U.S. auto makers.

Obama also orders the U.S. Dept. of Transportation to tighten fuel-economy requirements by 2011, but promises neither directive will jeopardize the struggling Detroit Three.

California's bid to regulate carbon-dioxide emissions was denied last year by the Bush administration and has been opposed by auto makers as too costly.

OEMs have fought state-by-state emissions codes, arguing the patchwork of rules would result in billions of dollars of additional costs or prevent the sale of some cars and trucks in certain states.

Obama's directives come as General Motors Corp. and Chrysler LLC draw on $17.4 billion in taxpayer loans to stave off bankruptcy. But Obama's recent remarks suggest the likelihood of a national emissions policy, rather than a hodgepodge of state rules.

“The federal government must work with, not against, states to reduce greenhouse-gas emissions,” Obama says from the White House. “The days of Washington dragging its heels are over. My administration will not deny the facts; we will be guided by them.”

However, Obama also says his administration will not “pass the buck” by pushing the emissions rulemaking onto the states entirely and promises to take into account the present challenges facing the auto industry and the taxpayer dollars keeping GM and Chrysler afloat.

“Our goal is not to further burden an already struggling industry, it is to help America's auto makers prepare for the future,” Obama says.

California and more than a dozen other states have sued to regulate CO2 emissions, while two federal courts have declared U.S. corporate average fuel-economy requirements do not pre-empt state laws.

But in the wake of new CAFE standards last year calling for auto makers to achieve a fleet-wide fuel economy of 35 mpg (6.7 L/100 km) by 2020, previous EPA Administrator Stephen Johnson used his authority to deny California's waiver request.

State Emissions Mandate, Federal Fuel Economy at Odds in Washington
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