Obama proposes big fuel standards hike
Several major automakers have embraced the Obama administration’s proposal to push the industry further away from once-dominant gas guzzlers to more lean and efficient vehicles.
The proposal, which is the result of months of negotiations between the Obama administration and automakers, would require the companies to reach an average fuel efficiency across their U.S. fleets of 54.5 miles per gallon by 2025.
“This agreement on fuel standards represents the single most important step we’ve ever taken as a nation to reduce our dependence on foreign oil,” Obama said.
Flanked by top automaker executives, Obama said the new rules would lower the country’s oil use by 2.2 million barrels a day over the next 15 years.
“Can we do it? Well, we put a man on the moon; of course, we can do this,” said Fadel Gheit, senior analyst at Oppenheimer.
While fleets would be required to reach corporate average fuel economy, or CAFE, standards of 54.5 mpg, under real world driving conditions that can sap fuel economy, consumers will likely get fewer miles per gallon in many cases.
The goal is still a major step up from current standards that require auto makers to achieve 35.5 mpg by 2016.
“Many OPEC oil ministers are now having sleepless nights, because of the millions of barrels of oil … the U.S. will now not be importing,” Democratic U.S. Rep. Edward Markey said. Markey was co-author of the law that mandated higher fuel economy standards.