Congress’ CAFÉ Boost Plan Includes RMA’s Fuel Efficiency Provision

(Akron/Tire Review – Detroit News) The drive to hike fuel efficiency standards took a dramatic step forward May 8 when a Senate committee approved a 40 per cent increase over the next decade. SR 357 also includes a RMA-written amendment that would create national tyre rolling resistance standards and grading system.

Sen. Maria Cantwell (D-WA) included the tyre rolling resistance amendment, which RMA calls a “consumer education program.” RMA said the amendment was similar to HR 5632, which was passed the House Energy and Commerce Committee last year but never made it to the full House.

Democrats vowed to hold a full Senate vote sometime next month on the CAFE standards bill, which requires automakers to raise the average fuel economy of their vehicle fleets to 35 miles per gallon by 2020, a move the companies denounced as unrealistic.

The bill was unanimously approved by the Senate Commerce Committee, making it the first fuel economy bill to pass that hurdle since 1991. The move sets the stage for a major battle over new rules that could cost automakers tens of billions of dollars.

Sen. Cantwell apparently had filed a tyre fuel efficiency amendment to S357 that RMA opposed. RMA then worked with Cantwell to draft a revised amendment more consistent with HR5632, which it drafted last year.

Cantwell’s amendment would create a “national mandatory tyre fuel efficiency consumer information requirement” for passenger tyres, according to the RMA. That program would include the development of specific rolling resistance tests and a UTQG-like grading system, as well as mandating government-funded consumer education program on tyre care and fuel efficiency.

In the past six months, car companies have seen the ground shift beneath them on fuel economy as the Iraq war, record gasoline prices, calls for energy independence and growing concerns about climate change combined to pull away supporters who have long helped Detroit automakers beat back calls for tougher standards.

Dave McCurdy, head of the Alliance of Automobile Manufacturers, a trade group that represents General Motors Corp., Ford Motor Co., DaimlerChrysler AG, Toyota Motor Corp. and other automakers, called the bill “unrealistic and unattainable.”

“They really are more interested in political statements and posturing at this stage of the game,” said McCurdy, a former congressman. “I don’t see serious legislating going on. This is not the end game. This is the first inning and there’s a lot left to be played.”

In a sign of how serious the issue has become, the credit ratings service Standard & Poor’s said automakers face a long-term threat to their balance sheets as the European Union, Japan and the United States consider proposals to reduce emissions and boost fuel efficiency.

Regulations “pose a real risk to global automakers” financial performance, particularly as some are already under pressure from razor-thin margins,” S&P said in a report.

Senators from rural states like Alaska, Idaho and North Dakota have reversed course in recent months and signed on to mandatory fuel economy increases — despite the fact that Detroit automakers say those requirements could threaten their ability to produce large vehicles, including pickups popular in rural states.

At the same time, Detroit automakers’ political clout has diminished as all three close factories and cut thousands of jobs, while the United Auto Workers’ sway among Democrats softens with its declining ranks.

The best hope of automakers foreign and domestic may be in sticking together – advice that’s been delivered in private by Rep. John Dingell (D-MI), the powerful chairman of the House Energy and Commerce Committee.

Dingell is certain to come under more pressure to do something on fuel economy, even though he wants a broader bill that would require other industries to do their part to reduce greenhouse gas emissions.

House Speaker Nancy Pelosi said Tuesday the lower chamber would vote on a fuel economy proposal before the end of the year.

Automobiles account for 20 per cent of U.S. greenhouse gas emissions, which have been linked to global warming. Improving fuel economy is considered one of the best ways to reduce emissions.

Automakers warn it will be very expensive, however, if not impossible, to meet the proposed fuel economy mandates. They say it could add as much as $6,000 to the cost of every vehicle and force them to abandon some market segments – especially big vehicles, the most profitable for Detroit. Senators and environmentalists reject that argument.