White House considers big boost to fuel economy

Dina Cappiello, Associated Press

WASHINGTON - The Obama administration is telling American automakers that it would like cars and light trucks to average 56.2 miles per gallon by 2025 - a boost to fuel economy that would save consumers money at the pump and help with global warming but drive up the cost of automobiles.

Administration officials floated the number at separate meetings last week with the Detroit Three - General Motors, Ford and Chrysler - according to people in government and industry familiar with the discussions. They spoke on condition of anonymity because they weren't authorized to talk publicly about them.

While it is just a starting point, the figure is the first hint of where the government may be headed as it works to set a 2017-2025 fuel economy standard. Last fall, the Transportation Department and the Environmental Protection Agency said they would consider a federal standard somewhere between 47 and 62 mpg.

The upper end of the range would mean a massive shift in what Americans drive. A government analysis found about half the lineup of new vehicles would need to be gas-electric hybrids under the most aggressive standards. The technology needed to achieve a 56 mpg standard, according to administration estimates, would add $2,100 to $2,600 to the price of a car. But because the vehicles would need less fuel, owners would make up the difference with fewer trips to the gas station.

Environmentalists are pushing for the most stringent standard, but automakers have thus far said they would be willing to work over the next eight years on vehicles that get between 42.6 and 46.7 miles per gallon.

The Obama administration is hoping to find some common ground and reach a deal before it makes a formal proposal in September.

Early in 2009, the White House announced a landmark agreement with automakers and states requiring cars and light trucks on average to achieve 35.5 miles per gallon by 2016 and set the first-ever standards for greenhouse gas emissions from tailpipes.

The stakes are higher this time around, since legislation to curb climate change is no longer being pursued by the White House, which is looking for other ways to address global warming. High gasoline prices have also put pressure on the administration not only to find ways to boost oil supply, but also reduce demand.

"We continue to work closely with a broad range of stakeholders to develop an important standard that will save families money and keep the jobs of the future here," White House spokesman Clark Stevens said in a statement. "A final decision has not been made, and as we have made clear we plan to propose a standard in September."

The goal of 56.2 mpg is tough, but General Motors will figure out a way to reach it, said Mark Reuss, the company's North American president. He would not say what technologies GM would use to reach the target, but he conceded that many easier, less-costly solutions already are under way or have been done such as switching to smaller engines and developing more fuel-efficient transmissions.

"When you put those things in for the first time, they may be more expensive," he said. "But this is a volume and scale industry. What was very expensive in the past is no longer very expensive."

Ford Motor Co., in a written statement, said discussions with the administration are ongoing, but that it "supports increasing fuel economy requirements with one national program that is data driven and factors in the impact ... on jobs, the economy, consumers and safety."

Dan Becker, director of the Safe Climate Campaign at the Center for Auto Safety, cautioned against making too many assumptions, saying that more important than the standard is how automakers will be allowed to achieve it.

"It is not just the number that matters. It's the loopholes underneath it," Becker said. "And automakers will look to turn whatever number it is into Swiss cheese."

Technology already is available for some cars to reach beyond the 56.2 mpg threshold. The EPA has determined that General Motors' Chevrolet Volt electric car will get 93 mpg in combined city and highway driving. The Nissan Leaf electric car gets the equivalent of 106 mpg in city driving and 92 mpg on the highway.

But electric motors and batteries aren't quite ready to power larger vehicles such as pickup trucks, creating a challenge for Detroit automakers who get a significant portion of their profits from larger vehicles.

--- Associated Press writer Tom Krisher in Detroit contributed to this report.