Fuel Economy Standards Going Up 2MPG for 2011

The Obama administration will announce on Friday a combined car and light truck fuel economy standard for the 2011 model year of 27.3 miles per gallon, a first step in a much broader re-working of the federal fuel economy rules that will continue later this year.

The administration is required to set the standard before the end of March under the 2007 energy law. President Obama has ordered federal officials to redo proposed standards for model years 2012 to 2016 to comply with plans for greater restrictions on global warming gases across industries.

The auto industry is also going to have to cope with the likelihood that the U.S. Environmental Protection Agency will allow California and other states to set their own fuel economy/greenhouse gas standards in the next few months.

The 2011 standard is an increase of 2 m.p.g. over current standards. New cars will need to meet a 30.2 m.p.g. standard, while light trucks, including sport utility vehicles, must hit 24.1 m.p.g. There is no problem meeting those standards for the automakers. But as an industry, Detroit automakers as well as Asian and European companies are fighting even stiffer fuel economy standards expected to be enforced by 2015.

European cars are far more fuel efficient than the U.S. fleet because consumers are subject to stiff gas taxes that creates a natural market demand for smaller, more fuel efficient vehicles and engines. But U.S. politicians say they if they voted for similar taxes, they would be voted out of office.

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