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Congress approves auto fuel economy increase, more alternative fuels
Bill requires refiners to use 36 billion gallons of ethanol by 2022
December 19, 2007 | Rapid City Journal

WASHINGTON -- It was in response to the early 1970s energy crisis and gasoline lines that Congress in 1975 directed automakers to improve the fuel efficiency of their cars.

That wouldn't happen again for more than three decades -- not until Tuesday.

Congress sent to President Bush a truncated, although no less dramatic, energy bill that will require an increase in the fuel efficiency of cars, SUVs and small trucks by 40 percent to 35 miles per gallon by 2020.

President Bush will sign the legislation today at the Energy Department.

The energy bill, which also calls for a huge increase in the use of ethanol as a motor fuel and requires new appliance-efficiency standards, was approved by the House 314-100 after clearing the Senate last week, 86-8.

"This is a choice between yesterday and tomorrow" on energy policy, declared House Speaker Nancy Pelosi, D-Calif., who was closely involved in crafting the legislation. "It's groundbreaking in what it will do." In a significant shift to spur increased demand for nonfossil fuels, the bill requires refiners to use 36 billion gallons of ethanol by 2022, a six-fold increase over today's ethanol production. And it imposes new energy efficiency standards for refrigerators, dishwashers
and other appliances as well as lighting, federal buildings and construction of commercial buildings.

Rep. Stephanie Herseth Sandlin, D-S.D., said the bill has historic potential for South Dakota's energy and agricultural producers and the overall rural economy. "With this legislation, we have taken an important next step toward achieving energy independence, and South Dakota producers stand ready to contribute to, and benefit from, this growth," Herseth Sandlin said.

She said she was pleased that the bill differentiates between passenger cars and higher horsepower work vehicles, such as pickups that farmers and ranchers need to run their operations, and sets mileage standards accordingly.

Although Herseth Sandlin was pleased with the final bill, she said she was disappointed that the Senate stripped it of provisions from the original House bill that would have provided tax incentives for use of renewable energy and a Renewable Electricity Standard that would have required 15 percent of American electricity to come from renewable sources, such as wind, by 2020. It also would have extended tax provisions that promote renewable energy development, such as the wind-energy-production tax credit.

Although some GOP lawmakers criticized the bill for failing to address the need for more domestic oil and natural-gas production, 95 Republicans joined Democrats in support of the bill.

Pelosi and Senate Majority Leader Harry Reid of Nevada acknowledged that they didn't get all they wanted -- unable to push through a tax package that would have rolled back $13.5 billion in tax breaks for oil companies and used the money to help spur wind, solar and biomass energy development and conservation programs.

The House passed the tax provisions, but the Senate fell one vote short of getting it through under threat of a presidential veto and a GOP filibuster. "We're going to be back and get the vote quicker than you think," Reid said at a news conference with Pelosi.

But Democrats said those shortcomings shouldn't take away from the importance of the approved bill.

"This legislation is a historic turning point in energy policy," Majority Leader Steny Hoyer of Maryland said, because it will cut demand for foreign oil and promote nonfossil fuels that will cut greenhouse gases linked to global warming.

It increases energy efficiency "from light bulbs to light trucks," said Rep. John Dingell, D-Mich., a longtime protector of the auto industry who was key to a compromise on vehicle efficiency increases. Many Republicans denounced the Democratic-crafted bill for failing to push for more domestic production of fossil fuels and for mandates some GOP lawmakers warned will not be possible.

"What we have here is a mandatory conservation bill," Rep. Joe Barton, R-Texas, said. He argued that the auto fuel efficiency requirements and the huge increase in ethanol use may not prove to be technologically or economically possible.
Democrats disagreed. The legislation takes measured and concrete steps that are achievable, Dingell said.

The Senate passed the bill last week after discarding billions of dollars in higher taxes on oil companies and a solar- and wind-power mandate that opponents said would raise electric rates in the Southeast. President Bush and Senate Republicans opposed those measures. The centerpiece of the bill remained the requirement for automakers to increase their industrywide vehicle fuel efficiency by 40 percent to an industry average of 35 mpg by 2020, compared to today's 25 mpg when including passenger cars as well as SUVs and small trucks. Congress has not changed the auto mileage requirement since it was first enacted in 1975.

Democrats said the fuel-economy requirements -- when the fleet of gas-miser vehicles are widely on the road -- eventually will save motorists $700 to $1,000 a year in fuel costs. They maintain the overall bill, including more ethanol use and various efficiency requirements and incentives, will reduce U.S. oil demand by 4 million barrels a day by 2030, more than twice the daily imports from the volatile Persian Gulf.

The automakers have repeatedly fought an increase in the federal fuel standard, known as CAFE, maintaining it would limit the range of vehicles consumers will have available in showrooms and threaten auto industry jobs. Bush also has argued against an arbitrary, numerical increase in the fuel efficiency requirement, preferring instead legislation to streamline the federal requirements and market
incentives to get rid of gas-guzzling vehicles.

But the automakers have accepted the political shift toward a tougher requirement. After the Senate approved the legislation last week, the White House immediately said Bush would sign it when it reaches his desk.

"While the president's alternative fuel standard and CAFE proposal would have gone farther and faster, we are pleased that Congress has worked together on a bipartisan way that provides the chance for the president to sign a bill that does not include tax increases," White House press secretary Dana Perino said.

The bill requires a massive increase in the production of ethanol for motor fuels, outlining an increase of ethanol use from the about 6 billion gallons this year to 36 billion gallons by 2022. After 2015, the emphasis would be on expanded use of cellulosic ethanol, made from such feedstock as switchgrass and wood chips, with two thirds of the ethanol -- 21 billion gallons a year -- from such noncorn sources. However, commercially viable production of cellulosic ethanol has yet
to be proven, and some Republicans have argued that the new requirements could be impossible to meet and may raise corn prices and threaten food supplies. The bill allows for a waiver if producers are unable to meet the federal requirement for cellulosic ethanol, which rises dramatically after 2015. "We have every confidence that we can meet the target," said Matt Hartwig, a spokesman for the Renewable Fuels Association, which represents ethanol producers.

The bill requires improved efficiency standards for lighting, commercial and government buildings, and appliances such as refrigerators, dishwashers and freezers. It also tells the Energy Department to issue efficiency standards more quickly. Light-bulb efficiency will have to increase 70 percent over today's most widely used bulbs by 2020.

Environmentalist widely hailed passage of the legislation, especially the first increase in auto-fuel economy since 1975, although expressing disappointment that the oil taxes and a proposal to require utilities to use renewable fuels did not pass.

"Just two years ago, 62 members of the Senate opposed any increase in fuel efficiency," said Phyllis Cuttino, director of the Pew Charitable Trusts Campaign for Fuel Efficiency, adding that not long ago "this achievement (was) unimaginable."

The bill is HR 6.

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