Today the Bush administration announced that it is postponing its promised decision on new Corporate Average Fuel Economy (CAFE) program standards and instead is leaving the decision to the incoming Obama administration. This is contrary to an announcement the current administration made in late 2008, which you can read about in a previous post I made in November.

As a result, the U.S. Department of Transportation (DOT) will not issue final rules for fuel economy standards for the 2011-15 model years as planned. The DOT says the recent financial difficulties of the automobile industry will require the next administration to conduct a review of matters affecting the industry, including how to effectively implement a new energy law requiring tougher standards.
The energy law, enacted in December 2007, requires standards to go up 40 percent by 2020 to a fleetwide average of at least 35 mpg.The National Highway Traffic Safety Administration proposed a rule for 2011-15 model years, raising standards by about 25 percent by the end of that period at an estimated cost of about $47 billion to the industry. The Bush administration had promised a final rule by the end of 2008. But that was before the economic downturn reached crisis proportions for the automobile industry, necessitating federal loans to General Motors and Chrysler to keep them afloat.

Federal law requires NHTSA to give automakers at least 18 months lead time before imposing higher CAFE standards. Therefore, time remains for the Obama administration to impose higher standards for the 2011 model year which, under the CAFE program, begins Oct. 1, 2010. The deadline for a final rule would be April 1.

The Bush administration said in a statement that it “has done significant work that will position the next transportation secretary to finalize a rule before the April 1, 2009, deadline.” Meanwhile, President-elect Barack Obama has nominated former Rep. Ray LaHood (R-Ill.) as the next secretary of transportation, who oversees NHTSA.

After today’s meeting between President-Elect Obama and Presidents Bush, Bush Sr., Bill Clinton and Jimmy Carter, there appears to be camaraderie among these esteemed and elite leaders. There is no doubt that these interesting times will lead to what we hope are innovative solutions to our nation’s problems, and that these important fuel economy issues don’t fall by the wayside.

Source: AutoWeek