Senate Debates Bill To Boost Auto Fuel Economy

Energy bill calls on automakers to boost their fuel economy 40 percent, to a fleet average of 35 miles per gallon by 2020.

WASHINGTON (AP) - As U.S. motorists face near record gasoline prices, the Senate took up an energy bill Tuesday that would raise auto fuel economy standards for the first time in nearly 20 years and make oil industry price gouging a federal crime.
Democratic leaders in both the Senate and House said they want broad energy legislation passed before the July 4th congressional recess, hoping to dampen growing voter anger over paying well above $3 (euro2.25) a gallon (3.8 liters) at gasoline pumps across the country.
The Senate bill calls on automakers to boost their fuel economy to a fleet average of 35 miles per gallon by 2020, about a 40 percent increase over what new cars and the less fuel efficient SUVs and pickup trucks are required to attain today. The auto standard of 27.5 miles per gallon (44.25 kilometers) was last increased 18 years ago. SUVs and small trucks must achieve a fleet average of 22.2 miles (35.73 kilometers) per gallon
Democratic Majority Leader Harry Reid said Tuesday the bill would help reduce the country's reliance on oil —an addiction that consumes more than 21 million barrels a day, nearly two-thirds of it imported.
The White House issued a statement opposing many of the most critical parts of the bill including the mandatory increase in automobile fuel economy. It said President George W. Bush would be urged to veto the legislation if it contained the price gouging language.
Reid has called the auto fuel efficiency measure, known as CAFE, the most contentious issue in the energy package.
Executives of General Motors, Ford and Chrysler called on Senate leaders last week arguing that the Senate bill's requirements may not be achievable. Sen. Carl Levin, a Democrat from the automakers' state of Michigan, is working on a more modest fuel economy proposal that he says automakers believe they can meet.
''The handwriting has been on the wall for a long time,'' said Sen. Dianne Feinstein, a Democrat and a long time advocate for more stringent auto fuel economy requirements. She said numerous studies have shown manufacturers can meet CAFE increases more stringent than those being considered by the Senate.
The Senate bill, which faces numerous hurdles to overcome over the next two weeks, also would sharply ramp up the use of ethanol as a substitute for gasoline, requiring production of 36 billion gallons (136 billion liters) of ethanol a year by 2022, five times today's production.
While the additional ethanol initially would come from corn, eventually nearly two-thirds of it is expected to be produced from prairie grasses, wood chips and other cellulosic sources.
Many of the bill's provisions have bipartisan support, but Republicans want more, especially more domestic production of oil, natural gas and coal as well as expansion of nuclear power.
The Democratic bill ''doesn't do anything to address expanding domestic (energy) production, and it won't do a single solitary thing to reduce gas prices,'' said Republican Minority Leader Mitch McConnell.
But Sen. Maria Cantwell, a Democrat, said a price gouging provision she has been advocating may reduce the prospects of future price spikes.
It would give the Federal Trade Commission broader authority to investigate possible wholesale oil market manipulation — from the legitimacy of refinery shutdowns to whether gasoline is being exported to limit domestic supplies.
For the first time, it would be a federal crime to charge ''unconscionably excessive'' prices for petroleum products at the wholesale or retail level. Critics of the provisions, including the Bush administration, said the measure amounts to price regulation and could lead to supply shortages.
''The federal government has all the legal tools necessary to address price gouging,'' a White House statement said.
The oil industry has repeatedly argued that many investigations have failed to uncover price fixing by oil companies. ''If there is no manipulation, there should be no fear of a strong federal statute,'' Cantwell countered at a news conference Tuesday.
To reinforce lawmakers' worries about reliance on imported oil, the Senate added a provision to the bill Tuesday that would require the president to establish policies that cut petroleum use by 10 million barrels a day by 2031. Opponents of the bill said it is not needed since other provisions in the bill already would accomplish reductions in oil demand. Still, the amendment offered by Democratic Sen. Evan Bayh was approved 63-30.
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