Skepticism over Bush’s fuel saving plan

By JOHN CRAWLEY

Influential members of Congress expressed doubt on Wednesday about the White House goal of raising auto fuel efficiency by 4 percent next decade, convinced the target would harm U.S. manufacturers.

Rep. John Dingell, a Michigan Democrat and chairman of the House of Representatives Energy and Commerce Committee, suggested change is inevitable but he is not sold on the White House approach for saving 8.5 billions of gasoline by 2017.

“We have a target but we don’t know how we’re going to get there,” Dingell said after skewering the Bush administration initiative at an Energy and Commerce subcommittee hearing.

Administration officials acknowledged after sharp questioning by Dingell that much of the data for their proposal for passenger vehicles is rough or old, and little in-house study has been done.

The administration has stressed that the 4 percent threshold beginning in 2010 is merely a goal outlined by President George W. Bush. Its legislative proposal did not include a savings target, pending further analysis.

Nevertheless, Dingell’s skepticism was matched by other panel members, notably those whose districts or states include financially struggling U.S.-based automakers General Motors Corp., Ford Motor Co. and Chrysler Group, a unit of DaimlerChrysler AG.

“We need to seriously look at the impact of this proposal on the U.S. automotive economy,” said Rep. Fred Upton, a Michigan Republican.

“While reforms could be productive, I believe the proposed four percent rate of increase in the standard is not reasonable without a huge cost on such a short time line,” Upton said.

Big domestic and foreign-based automakers are resigned to changes in fuel economy but agree that a 4 percent hike would be painful. They also want the Republican-led administration to determine any increase, not the Democratic-led Congress.

Auto chief executives are expected to testify before the Energy and Commerce subcommittee in the coming weeks.

Edward Lazear, chairman of the White House Council of Economic Advisers, told the subcommittee the administration did not want to punish automakers. Nicole Nason, the administrator of the Transportation Department agency that determines fuel standards, said jeopardizing the manufacturing base “would be something we absolutely want to avoid.”

Nason said, however, some automakers may have to do more to comply than others to meet a 4 percent increase, a step that could also force changes in the fleet composition. “We would expect to see greater penetration for (gas-electric) hybrids and diesels,” she said.

Nason said her agency, the National Highway Traffic Safety Administration, would raise the standard by a practical amount and appealed to Congress not to mandate a target.

She has sought product plans from industry but has not yet analyzed what a 4 percent increase would cost. However, Nason disputed Upton’s estimated industry price tag of $100 billion — $40 billion for GM but far less for Japan’s Toyota Motor Corp. and Honda Motor Co..

Nason wants authority from Congress to overhaul how fuel savings are calculated for sedans, compacts, wagons and other passenger cars. Lawmakers have already granted NHTSA similar authority for the light truck class, moving from a fleet-based average to a formula based on vehicle size and weight.

Light trucks, including sport utilities, pickups and vans, must average 24.1 miles per gallon by 2011. Their mileage goal would rise under the White House proposal. Passenger cars currently must get 27.5 mpg, a standard unchanged for years.

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