Nov. 13 (Bloomberg) -- U.S. carmakers, reeling from the worst market conditions in 25 years and seeking federal aid, face new burdens should President-elect Barack Obama fulfill a pledge to let California regulate automotive greenhouse gases.

California, which has federal authority to set pollution rules that exceed U.S. standards, was denied a waiver from the U.S. Environmental Protection Agency last December to begin a state program intended to cut vehicle carbon exhaust and other gases tied to global warming 30 percent by 2016. During his campaign, Obama said he'd reverse that decision as president.

``We are expecting that we will get our waiver from the new administration,'' Mary Nichols, chairwoman of California's Air Resources Board, the state agency that created the program, said on Nov. 6. ``We expect to be able to move forward.''

General Motors Corp., Ford Motor Co., Chrysler LLC and companies represented by the Alliance of Automobile Manufacturers trade group sued to block California's rules, arguing it will cost billions of dollars to develop vehicles clean enough to comply. They also say the program creates regulatory chaos and will reduce the types of models they can sell in California and other states that want to adopt the rules.

``We support a national approach to greenhouse-gas policy,'' Dave McCurdy, president of the Washington-based Alliance, said in an interview. ``It would be in our nation's best interest if we could build unity on how we approach this. There should be another option to achieve a common or shared goal.''

Nichols, who worked in the Clinton administration, has been mentioned as possible candidate for EPA administrator under Obama.

Talking With Obama

McCurdy, a former Democratic congressman from Oklahoma, declined to say whether the industry group, which has sued California on behalf of 11 automakers it represents to halt the rules, would discuss the matter with Obama before his term begins on Jan. 21.

Congress last year passed a $25 billion package of low-cost loans for carmakers and suppliers to produce advanced technology autos such as battery-powered cars and hybrids, the types of vehicles needed to meet California's rules.

The ability of GM, Ford and Chrysler to apply for such loans has been challenged by the companies' more pressing needs for funds to maintain current operations. House Speaker Nancy Pelosi on Nov. 11 urged Congress to pass an auto-industry bailout, embracing the premise that GM is too big to be allowed to fail.

Stalled Program

The California program was signed into law by Governor Arnold Schwarzenegger in 2004. At the time automakers argued that complying with it would cost at least $6 billion a year to modify vehicles for the state, or at least $3,000 per vehicle.

Since then, at least 17 other states have said they'll also follow the California rules.

Obama co-sponsored legislation in January that would direct the EPA to grant California the waiver to regulate greenhouse-gas emissions from vehicles.

``Effectively tackling global warming demands bold and innovative solutions, and given the failure of this Administration to act, California should be allowed to pioneer,'' Obama said then.

The program originally was to begin with 2009 model vehicles. Should a waiver be granted early next year, the rules would likely take effect with 2010 models, said Stanley Young, a spokesman for the Air Resources Board in Sacramento.

California won't be able to meet its ambitious global warming- mitigation targets of reducing greenhouse-gas emissions to 1990 levels by 2020 without addressing vehicles on the road, said Jerry Hill, a member of the Air Resources Board.

``It would be very difficult to reach the goals without the waiver,'' Hill said.

To contact the reporters on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.netAdam Satariano in San Francisco at asatariano1@bloomberg.net

Last Updated: November 13, 2008 12:02 EST