2nd UPDATE: Obama Tells EPA: Review Calif Car Emissions Plan
January 26 2009 - 1:20PM
Dow Jones News
U.S. President Barack Obama on Monday ordered the Environmental
Protection Agency to consider allowing California to regulate
greenhouse-gas emissions from automobiles, a policy that could spur
the development of new vehicles.
"The federal government must work with, not against, states to
reduce greenhouse-gas emissions," Obama said at a press conference
filled with environmental activists and members of his cabinet. He
ordered the EPA to "immediately review" a 2007 decision to deny
California the waiver it needs to go forward.
The action marks a sharp reversal from the administration of
President George W. Bush, which concluded that California wasn't
entitled to its own standards as global warming wasn't unique to
the state. In putting the U.S. on a different course, Obama was
signaling a broader commitment to reshaping U.S. energy habits.
"America's dependence on oil is one of the most serious threats
that our nation has faced," Obama said. "It puts the American
people at the mercy of shifting gas prices, stifles innovation, and
sets back our ability to compete."
It isn't clear how quickly the EPA will make its decision -- or
how quickly the Obama administration can move the U.S. away from
fossil fuels. The new administration already faces a severe
economic recession, something that could make it harder for car
companies to finance innovation. On Monday, General Motors Corp.
(GM) said in a statement that while it was "ready to engage" with
the Obama administration, any talks should take into account
"economic factors" and the pace at which new technologies can
development.
"We hold no illusion about the task that lies ahead," Obama
said. "I cannot promise a quick fix. No single technology or set of
regulations will get the job done. But we will commit ourselves to
steady, focused, pragmatic pursuit of an America that is freed from
our energy dependence and empowered by a new energy economy."
Obama acted with the backing of the environmental wing of his
base, which rushed out press releases to praise his action.
Environment America, an environmental group, estimated that
applying the California standard in just 13 other states would save
50 billion gallons of gasoline by 2020, for a total savings of $93
billion, and reduce greenhouse-gas emissions by more than 450
million metric tons in total by 2020.
Obama separately ordered the U.S. Department of Transportation
to finalize new automobile fuel-efficiency standards so that they
will be in place for the 2011 model year. The Bush administration
was supposed to implement the rules, mandated by a 2007 law, but
left the issue to Obama.
EPA staff has already told Congress that allowing California to
regulate greenhouse-gas emissions from vehicles could spur
technological innovation not just in California, but across the
country. That is because states are free to stick with federal
standards or adopt the California standard. Fourteen other states
have already adopted the California standard and four more are
considering doing so.
The California rules apply to greenhouse-gas emissions, and
aren't fuel-efficiency standards. But California regulators have
said that their standard would result in vehicles that average 44
miles per gallon. That compares with a 35 mile-per-gallon standard
established by Congress for 2020.
Among the possible new technologies to be developed: electric
cars. As part of a broad rule-making on greenhouse-gas emissions
last year, the EPA staff said that between 2020 and 2025, vehicle
fuel-efficiency standards could be well above the 35-mile-per
gallon mandated by Congress, based on technologies such as plug-in
hybrid vehicles, which run partly on rechargeable batteries. As if
to underscore the point, acting Federal Energy Regulatory
Commission Chairman Jon Wellinghoff said Monday that regulators and
the automobile industry must integrate electric vehicles into the
national power grid.
"If you're an automobile company, you'd better get on the
bandwagon, because if you don't, you're going to be left out of the
band because there is definitely going to be a move toward
electrification worldwide," Wellinghoff said.
-By Siobhan Hughes, Dow Jones Newswires; 202-862-6654;
Siobhan.Hughes@dowjones.com
(Ian Talley of Dow Jones Newswires contributed to this
report.)
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