- Congress by a wide margin approved the first increase in automobile fuel economy in 32 years, and President Bush plans to quickly sign the legislation, accepting the mandates on the auto industry.
The energy bill, boosting mileage by 40 percent to 35 miles per gallon, passed the House 314-100 and now goes to the White House, following the Senate's approved last week.
In a statement, the White House said Bush will sign the legislation at the Energy Department on Wednesday.
In a dramatic shift to spur increased demand for nonfossil fuels, the bill also requires a six-fold increase in ethanol use to 36 billion gallons a year by 2022, a boon to farmers. And it requires new energy efficiency standards for an array of appliances, lighting and commercial and government buildings.
"This is a choice between yesterday and tomorrow" on energy policy, declared House Speaker Nancy Pelosi, D-Calif., who was closely involved in crafting the legislation. "It's groundbreaking in what it will do."
While some GOP lawmakers criticized the bill for failing to address the need for more domestic oil and natural gas production, 95 GOP lawmakers joined Democrats in support of the bill.
"This legislation is a historic turning point in energy policy," said Majority Leader Steny Hoyer of Maryland because it will cut demand for foreign oil and promote nonfossil fuels that will cut greenhouse gases linked to global warming.
It increases energy efficiency "from light bulbs to light trucks," said Rep. John Dingell, D-Mich., a longtime protector of the auto industry who was key to a compromise on vehicle efficiency increases.
Many Republicans denounced the Democratic-crafted bill for failing to push for more domestic production of fossil fuels and for mandates some GOP lawmakers warned will not be possible.
"What we have here is a mandatory conservation bill," said Rep. Joe Barton, R-Texas. He argued that the auto fuel efficiency requirements and the huge increase in ethanol use may not prove to be technologically or economically possible.
Democrats disagreed. The legislation takes measured and concrete steps that are achievable, said Dingell.
The Senate passed the bill last week after discarding billions of dollars in higher taxes on oil companies and a solar and wind power mandate that opponents said would raise electric rates in the Southeast. President Bush and Senate Republicans opposed those measures.
The centerpiece of the bill remained the requirement for automakers to increase their industrywide vehicle fuel efficiency by 40 percent to an industry average of 35 mpg by 2020 compared to today's 25 mpg when including passenger cars as well as SUVs and small trucks.
Congress has not changed the auto mileage requirement since it was first enacted in 1975.
Democrats said the fuel economy requirements eventually — when the fleet of gas-miser vehicles are widely on the road — will save motorists $700 to $1,000 a year in fuel costs. They maintain the overall bill, including more ethanol use and various efficiency requirements and incentives, will reduce U.S. oil demand by 4 million barrels a day by 2030, more than twice the daily imports from the volatile Persian Gulf.
The automakers have repeatedly fought an increase in the federal fuel standard, known as CAFE, maintaining it would limit the range of vehicles consumers will have available in showrooms and threaten auto industry jobs. Bush also has argued against an arbitrary, numerical increase in the fuel efficiency requirement, preferring instead legislation to streamline the federal requirements and market incentives to get rid of gas guzzling vehicles.
But the automakers have accepted the political shift toward a tougher requirement. After the Senate approved the legislation last week, the White House immediately said Bush would sign it once it reaches his desk.
"While the president's alternative fuel standard and CAFE proposal would have gone farther and faster, we are pleased that Congress has worked together on a bipartisan way that provides the chance for the president to sign a bill that does not include tax increases." said White House press secretary Dana Perino.
The bill requires a massive increase in the production of ethanol for motor fuels, outlining a rampup of ethanol use from the roughly 6 billion gallons this year to 36 billion gallons by 2022. After 2015, the emphasis would be on expanded use of cellulosic ethanol, made from such feedstock as switchgrass and wood chips, with two thirds of the ethanol — 21 billion gallons a year — from such non-corn sources.
However, commercially viable production of cellulosic ethanol has yet to be proven and some Republicans have argued that the new requirements could be impossible to meet and may raise corn prices and food supplies.
The bill requires improved efficiency standards for lighting, commercial and government buildings, and appliances such as refrigerators, dishwashers and freezers. It also tells the Energy Department to issue efficiency standards more quickly.
Democrats failed to get through a broad tax package that they had designed to pay for incentives aimed at spurring the development of wind, solar and alternative fuels such as cellulosic ethanol, as well as energy efficiency and conservation programs.
The package would have rolled back $13.5 billion in tax breaks enjoyed by the country's five largest oil companies. The tax package passed the House earlier this month, but was rejected in the Senate as Democrats failed by one vote to overcome a GOP filibuster. The White House said Bush opposed singling out the oil industry for higher taxes and that if the taxes were included, he would veto the bill.
Originally posted on Fleet Financials