March 27, 2009 at 11:22 am

Average mpg to increase 8%

Vehicle fleets will need to get 27.3 mpg by 2011

WASHINGTON -- The U.S. Transportation Department today will mandate the first increase in passenger car fuel efficiency in more than 25 years -- a historic first step in a sweeping reinvention of the nation's cars and trucks.

The Obama administration's 2011 model year standard will require the nation's cars and trucks to meet a fleetwide average of 27.3 miles per gallon -- 8 percent above the 2010 model year requirement of 25.3 mpg, an administration official confirmed Thursday night. The regulations for the 2011 model year are final.

The fuel efficiency standard comes as President Barack Obama strongly hints he will soon endorse additional aid to the struggling American automakers, as they attempt to slim their work forces, cut costs and produce more efficient, environmentally friendly vehicles. But he said assistance must be tied to tough conditions.

"We will provide them some help," Obama said during a televised town hall meeting Thursday.

"I think it is appropriate for us to say, 'are there ways that we can provide help for the U.S. auto industry to get through this very difficult time?' But the price is that you've got to finally restructure to deal with these long-standing problems."

General Motors Corp. and Chrysler LLC have received $17.4 billion in government loans and have sought $21.6 billion in additional aid.

Automakers have said stricter fuel rules will cost them billions.

Under the revised Corporate Average Fuel Economy standards, passenger cars will have to average 30.2 mpg and light trucks 24.1 mpg in the 2011 models that hit dealerships in the fall of 2010.

The fuel improvements will save an estimated 887 million gallons of fuel and eliminate 8.3 million metric tons of greenhouse gas emissions, the official said.

The Obama administration opted to finalize only the 2011 model year standards in part because it was required to wrap up those regulations by Tuesday under a 2007 energy law.

Administration officials will spend the next year reviewing the 2012-15 model years as they seek a comprehensive emissions policy.

The proposal may anger some environmentalists, because the 2011 proposal doesn't go as far as what the Bush administration proposed in April 2008.

Instead, the fuel efficiency figures for 2011 are identical to a final, unreleased Bush administration proposal that had been cleared by the White House for final publication in October. The 523-page draft was obtained by The Detroit News in January.

The Bush administration ultimately abandoned its efforts to finalize the regulation in January, before Obama took office.

David Kelly, who was acting director of the National Highway Traffic Safety Administration until Jan. 20, said the Obama administration's decision to adopt the Bush administration figures showed the agency had done a good job after two years of work.

"For as much as people wanted to criticize NHTSA, this is clearly the best step that is out there that is the best step to improve fuel economy and do so in a reasonable way that doesn't force manufacturers into bankruptcy," Kelly said Thursday.

The increase in fuel economy requirements for passenger cars is the first since Congress created the CAFE program in 1975. In the wake of the Arab oil embargo, it ordered automakers to boost fuel efficiency from 13 mpg to 27.5 mpg over a decade

Automakers have outstripped the federal requirements, making it easier in the short run for them to meet the new requirements. In the 2007 model year, automakers averaged 31.3 mpg for passenger cars, and 23.1 mpg for light trucks, above the 22.2 mpg mandate.

The car companies and Michigan members of Congress blocked new increases in passenger car requirements for more than two decades, but grudgingly agreed in 2007, in the face of then-skyrocketing oil prices.

The Obama administration's regulations keep automakers on a more aggressive timetable than what Congress required in the 2007 energy bill, which called for an industry fleet average of 35 mpg by 2020 for cars and trucks combined.

By 2020, the new requirements will have forced dramatic changes in vehicle lineups with a greater focus on hybrids and diesels and wider use of smaller engines.

Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers, the group representing Detroit's Big Three, Toyota Motor Corp., Daimler AG and six other automakers, said they are committed to improving fuel efficiency.

"Our goal is to bring cleaner, safer and more fuel-efficient vehicles to the market as quickly as possible," he said.

"It is now important that the Department of Transportation provide automakers with the certainty and consistency needed by setting standards for 2012 and beyond. ... We are hopeful that the Obama administration can find ways to bridge state and federal concerns, and move all stakeholders toward an aggressive, national fuel economy/greenhouse gas emissions program administered by the federal government."

The Obama administration is expected to decide by May whether to give California and 13 other states permission from the Environmental Protection Agency to impose a 30 percent reduction in tailpipe emissions by 2016. The regulation would have the effect of a fleetwide fuel economy of 34.5 mpg by 2015.

You can reach David Shepardson at (202) 662-8735 or dshepardson@detnews.com">dshepardson@detnews.com.