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White House considers big boost to fuel economy

White House considers big boost to fuel economy

June 29th, 2011 in News

WASHINGTON (AP) - The Obama administration is telling American automakers that it would like cars and light trucks to average 56.2 miles per gallon by 2025 - a boost to fuel economy that would save consumers money at the pump and help with global warming but drive up the cost of automobiles.

Administration officials floated the number at separate meetings last week with the Detroit Three - General Motors, Ford and Chrysler - according to people in government and industry familiar with the discussions. They spoke on condition of anonymity because they weren't authorized to talk publicly about them.

While it is just a starting point, the figure is the first hint of where the government may be headed as it works to set a 2017-25 fuel economy standard. Last fall, the Transportation Department and the Environmental Protection Agency said they would consider a federal standard somewhere between 47 and 62 mpg.

The upper end of the range would mean a massive shift in what Americans drive. A government analysis found about half the lineup of new vehicles would need to be gas-electric hybrids under the most aggressive standards. The technology needed to achieve a 56 mpg standard, according to administration estimates, would add $2,100 to $2,600 to the price of a car. But because the vehicles would need less fuel, owners would make up the difference with fewer trips to the gas station.

Environmentalists are pushing for the most stringent standard, but automakers have thus far said they would be willing to work over the next eight years on vehicles that get between 42.6 and 46.7 miles per gallon.

The Obama administration is hoping to find some common ground and reach a deal before it makes a formal proposal in September.

Early in 2009, the White House announced a landmark agreement with automakers and states requiring cars and light trucks on average to achieve 35.5 miles per gallon by 2016 and set the first-ever standards for greenhouse gas emissions from tailpipes.

The stakes are higher this time around, since legislation to curb climate change is no longer being pursued by the White House, which is looking for other ways to address global warming. High gasoline prices have also put pressure on the administration not only to find ways to boost oil supply, but also reduce demand.

"We continue to work closely with a broad range of stakeholders to develop an important standard that will save families money and keep the jobs of the future here," White House spokesman Clark Stevens said in a statement. "A final decision has not been made, and as we have made clear we plan to propose a standard in September."