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Detroit Free Press

US Unveils 35.5-mpg Rule by 2016

Justin Hyde

The Obama administration unveiled its historic rules today setting a
35.5 mpg average for the U.S. auto industry by 2016, which the
government said would cut fuel consumption by
40% and generate $130 billion in benefits.

While the new rule will
cost the industry $52 billion to meet, automakers embraced the standards
for avoiding a patchwork of state and federal regulations, and called
on the government to begin work immediately on updates for the 2017
model year and beyond.

Administration officials said the rules
would raise the average price of a new vehicle by less
than $1,000 in the 2016 model year, and that many consumers would earn
back the cost in fuel savings over three years.

"This is the
most aggressive fuel economy
standard ever set in the United States for cars and trucks," said U.S.
Transportation Secretary Ray LaHood.

The joint rule between
the Department of Transportation and the U.S. Environmental Protection
Agency is the first U.S. limit designed to reduce greenhouse gas
emissions, stemming from a Supreme Court ruling that classified carbon
dioxide as a pollutant under federal law.

Automakers had
backed the rule, which sets a target for every vehicle's fuel economy
based on its size. The actual fuel economy target is 34.1 mpg, with the
difference made up through more efficient air conditioning that should
reduce carbon emissions.

The California Air Resources Board
and environmental groups also hailed the rule.

The unsteady
détente between the industry, environmentalists and the state of
California could disappear if California moves to set standards for
years beyond 2016 first - a move automakers oppose.

needs a roadmap to reduced dependence on foreign oil and greenhouse
gases, and only the federal government can play this role," said Dave
McCurdy, president and CEO of the Alliance of Automobile
Manufacturers. "Now we need to work on 2017 and beyond."

2016, the average fuel economy for cars is estimated to be 37.8 mpg,
while light trucks are expected to average 28.8 mpg. Automakers will get
credits for building electric vehicles, plug-in hybrids and hydrogen
fuel-cell models.

One dissent came from auto dealers, who
said the rules would cost consumers too much.

"With tight
family budgets and a shaky job outlook, consumers want to maximize their
transportation dollars, not pay more for redundant rules and an
unnecessary bureaucracy," said Ed Tonkin, chairman of the National
Automobile Dealer Association.

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