August 23, 2005

US proposes to boost light-truck fuel economy

By Paul Simao

ATLANTA (Reuters) - U.S. auto regulators on Tuesday
proposed new standards that would improve gas mileage for
popular sport utility vehicles and other light trucks in an
effort to cut consumption and save consumers money.

But environmental and consumer groups said the broadest
overhaul of the federal mileage program in 30 years -- proposed
during a summer of record pump prices -- did not go far enough
to lessen dependency on foreign oil. They said it would only
help domestic automakers build bigger vehicles. Small SUVs and
trucks would have tougher requirements than they do now.

The Transportation Department's National Highway Traffic
Safety Administration established new fleet or Corporate
Average Fuel Economy (CAFE) targets two years ago, raising the
requirement for light trucks to 22.2 miles per gallon (mpg)
from 20.7 mpg during the 2005-07 model years.

Passenger cars, which were not included in the new
proposal, must get an average of 27.5 miles per gallon.

The centerpiece of NHTSA's proposal on Tuesday would be to
drop the formula for calculating fuel economy that averages
performance over an automaker's entire light truck fleet,
establishing in its place six categories requiring different
fuel standards based on vehicle size.

This plan could hurt foreign manufacturers who have
historically offered a broader range of models than their U.S.
rivals to more easily comply with fuel mileage requirements.

But NHTSA is giving automakers the choice of the new
formula or the current one to reach its fuel targets between
model years 2008 and 2010. All manufacturers would have to
abide by the new formula in 2011.

Using the current formula, light vehicles would have to
achieve 22.5 mpg in model year 2008 -- which begins in early
2007 -- 23.1 mpg in 2009 and 23.5 mpg 2010.

Under the new calculation, small light vehicles would have
to achieve 26.8 mpg in model year 2008 compared to 20.4 for the
large models. By 2011, small vehicles would have to get 28.4
mpg compared to 21.3 mpg for the bigger ones.

Popular selling light trucks range from DaimlerChrysler's
PT Cruiser to the powerful Chevrolet Silverado pickup.

The government does not plan to require the largest light
trucks -- the Hummer H2, Ford Excursion and other models that
weigh between 8,500 and 10,000 pounds -- to meet fuel economy
standards because there are few on the market.

"This plan is good news for American consumers because it
will ensure that the vehicles that they will buy will get more
miles to the gallon and ultimately save them money," U.S.
Transportation Secretary Norman Mineta told reporters at a
morning news conference in Atlanta.

Mineta said the new formula would nearly double fuel
savings to 10 billion gallons of gasoline over the period and
maintain the administration's determination to lessen U.S.
dependence on foreign oil.

But environmental, consumer and other advocacy groups were
sharply critical. Some said the standard should seek a 1 mpg
increase per year at least.

"The administration has proposed a pathetically weak
increase in light truck miles per gallon standards and has
given automakers an increased opportunity to game the system by
increasing the size of their SUVs and other light trucks," said
Anna Aurilio, legislative director of the U.S. Public Interest
Research Group.

The Alliance of Automobile Manufacturers, the main trade
group for major U.S. and overseas vehicle makers, said it
supported CAFE reform. "The alliance members will fully
evaluate the proposed new system and analyze its impact on our
product and technology plans and will offer constructive
comments," a statement by the group said.

Jeffrey Runge, the NHTSA administrator, responded to the
criticism at a news conference at a Los Angeles gas station
later in the day. He said the revamped formula would be fairer
without sacrificing safety. "We will get fuel savings from
every size of vehicle," he said.

Administration officials hope to finalize the new
regulation next April after consulting manufacturers, consumers
and environmentalists over the next 90 days.

There were 8 million light trucks registered in the United
States in 2004. Nearly 60 percent of all new vehicles purchased
last year were light trucks, industry estimates show.

U.S. retail pump prices hit record $2.61 over the last
week, up 73 cents from a year ago, according to US government
data released on Monday. It can cost more than $50 to fill up
some large sport utilities.