US Cong agrees to increase fuel standard by 40%

WASHINGTON: Congress agreed to raise fuel-economy standards by 40% for cars and light trucks by 2020 in a move described by lawmakers as a historic step toward cutting US oil consumption and curbing global warming.

The new rules would require the US to set mileage standards for each type of vehicle to meet a national average of 35 miles per gallon. In exchange for a higher benchmark than automakers had wanted, the industry would continue to get credit for making vehicles that run on alternate fuels such as gasoline blended with ethanol.

“This landmark energy legislation will offer the automobile industry the certainty it needs, while offering flexibility to automakers and ensuring we keep American manufacturing jobs and continued domestic production of smaller vehicles,” House speaker Nancy Pelosi said in a statement.

The deal ends almost six months of opposition by the industry and marks the first overhaul of fuel-economy rules in three decades. Automakers argued that complying with a 40% increase would cost them billions of dollars that would be passed on to consumers. Environmental groups waged a multimillion-dollar campaign against the industry and urged lawmakers to act.

The proposal, worked out by House and Senate negotiators late Saturday, is part of a larger energy bill scheduled to be voted on in both houses of Congress this month. The bill must be signed by President Bush before it becomes law.

“This tough, national fuel-economy bill will be good for both consumers and energy security,” said Dave McCurdy, president of the Alliance of Automobile Manufacturers, which represents General Motors, Toyota Motor and seven other US and overseas-based automakers. “We support its passage.” GM chief executive Rick Wagoner said the rules pose “a technical and economic challenge to the industry.”