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Summary:
One of the least controversial provisions of the Energy Policy and Conservation Act of 1975 (P.L. 94-163) established corporate average fuel economy (CAFE) standards for new passenger cars. As oil prices rose, there was little expectation that manufacturers would have any difficulty complying with the standards. However, oil prices softened and the demand for small cars diminished. In response to petitions from manufacturers facing stiff civil penalties for noncompliance, the National Highway Traffic Safety Administration (NHTSA) relaxed the standard for model years 1986-1989. The current standard is 27.5 miles per gallon (mpg) for passenger automobiles and 20.7 mpg for light trucks, a classification that also includes sport utility vehicles (SUVs). However, on April 1, 2003, NHTSA issued a final rule to boost the CAFE of light-duty trucks by 1.5 mpg by 2007. The rule sets the interim standards at 21.0 mpg for model year (MY)2005, 21.6 mpg for MY2006, and 22.2 for MY2007. It is the first increase in CAFE since MY1996. Congress had included language in the FY1996-FY2001 DOT Appropriations prohibiting the use of appropriated funds for any rulemaking on CAFE, effectively freezing the standards. However, facing growing concern over the higher penetration of SUV sales as part of the national fleet, the FY2001 appropriations required a study of CAFE by the National Academy of Sciences (NAS). That study, released on July 30, 2001, concluded that it was possible to achieve a more than 40% improvement in light truck and SUV fuel economy over a 10-15 year period at costs that would be recoverable over the lifetime of ownership. The rulemaking has not quelled interest in CAFE. H.R. 6, the omnibus energy bill passed in the House on April 10, 2003, would authorize appropriations to NHTSA to conduct rulemakings and would require a study on the feasibility and effects of reducing fuel use by automobiles. During markup in the House Committee on Energy and Commerce, an amendment by Representative Markey to require reductions of 5% in automotive fuel usage by 2010 and an additional 5% by 2015 was defeated (14-38). An amendment offered on the floor of the House to include only the 5% savings by 2010 was defeated (162-268) as well. While NHTSA has issued a rule boosting light truck CAFE, some policymakers argue that more needs to be done. Senator Feinstein has also introduced legislation (S. 255) that, among other provisions, would expand the applicability of fuel economy standards to vehicles up to 10,000 pounds gross vehicle weight (GVW). The Fuel Economy Improvements Act (S. 794), introduced by Senator Durbin, would raise passenger car CAFE to 40 mpg by 2015. Opponents of measures like these argue that the automotive industry should not be further burdened at this time by higher CAFE requirements. There were sharp differences in the House and Senate CAFE proposals included in omnibus energy legislation (H.R. 4) debated in the 107th Congress. On September 19, 2002, the conferees agreed to the House-passed goal of saving 5 billion gallons, but shifted the window to MY2006-MY2012. The 107th Congress adjourned without taking final action on the bill.
