By September 15, 2016 Read More →

U.S. congressional panel to hold fuel rules hearing

fuel rules

Automobile manufacturers say fuel rules created in 2011 were made at a time when gas prices were higher and more consumers were buying cars. With lower gas prices, consumers are now purchasing more SUVs and pickups, making it difficult to meet fleet requirements. Reuters photo by Mike Blake.

Automakers say low gas prices make it difficult to meet fuel rules

By David Shepardson

WASHINGTON, Sept 15 (Reuters) – A congressional panel will hold a hearing on Sept. 22 to look at the fate of U.S. fuel efficiency rules through 2025 amid growing concerns from automakers.

An auto trade group representing General Motors Co, Ford Motor Co, Toyota Motor Corp, Daimler AG and Volkswagen AG has said with lower gasoline prices it would be difficult to meet the requirements. Sales of less fuel-efficient trucks and SUVs have risen as gas prices have fallen.

U.S. regulators must decide by 2018 on whether the 2022 through 2025 model year requirements are feasible or should be changed.

The U.S. House Energy and Commerce Committee is holding a hearing Thursday that will include testimony from U.S. regulators and auto trade groups.

“We need to know if these standards are impacting vehicle choices, raising prices, and most importantly whether they are pushing low-income consumers out of the car-buying market altogether,” said Representatives Michael Burgess and Pete Olson, both Republicans of Texas, in a joint statement.

In July, the U.S. Environmental Protection Agency and National Highway Traffic Safety Administration said automakers have the technology to meet aggressive mandates to hike fuel efficiency by 2025, but the fleet-wide improvement will not be as great as the Obama administration once forecast because buyers are switching to pickup trucks and SUVs.

When the Obama administration first outlined its goal of boosting average fleet fuel economy to 54.5 miles per gallon in 2011, regulators forecast that 67 percent of vehicles sold in 2025 would be cars.

Since then, gasoline prices have plummeted and truck and SUV sales have surged. The agencies forecast cars will be between 48 percent and 62 percent of the mix. Regulators now estimate the fleet will average 50 to 52.6 mpg in 2025.

Automakers are not required to achieve the target average. Instead, the government’s complex scorekeeping system allows them to hit different targets for different sizes of vehicles – with larger trucks and SUVs allowed to achieve lower targets than small cars.

Cars and trucks account for 42 percent of total U.S. oil consumption, or about 8 million barrels a day.

(Reporting by David Shepardson; editing by Chizu Nomiyama and Cynthia Osterman)

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