September 6, 2005

Senate Must Look at Tougher Mileage Rules -Senator

WASHINGTON -- Faced with a record-high national gasoline price of $3.07 per gallon, a senior Republican senator said on Tuesday it was time for lawmakers to take another look at imposing stricter mileage standards on mini-vans and other vehicles.

Several Democrats and environmental groups have long called for Congress to order better fuel economy for new vehicles as the single most effective way to slow U.S. oil demand growth. However, most Republicans and the White House oppose significantly higher mileage requirements because of the potential impact on U.S. automakers and passenger safety.

On Tuesday, the U.S. government reported that the average U.S. weekly retail gasoline price rocketed to $3.07 cents per gallon, up nearly 46 cents from last week, because of Katrina's damage to refineries and pipelines.

The new weekly record is close to the inflation-adjusted high of $3.12 a gallon hit in March 1981.

Republican Sen. Pete Domenici, chairman of the Senate Energy Committee, said lawmakers need to consider a variety of options to address the nation's energy problems.

"I believe we must take another look at CAFE (Corporate Average Fuel Economy) standards," Domenici, a New Mexico Republican, said in remarks at his committee's hearing on rising gasoline prices since Hurricane Katrina. The United States should also open more offshore areas to oil and drilling, he said.

"Some of these are hard steps to take," Domenici acknowledged. "Hurricane Katrina has reminded us that we cannot escape these decisions."

Gasoline demand accounts for about two of every five barrels of oil consumed in the United States.

Domenici was one of the chief authors of a new $14 billion energy law that aims to boost production of crude oil, natural gas, coal, nuclear and other forms of energy.

In June, the Senate voted to reject a Democratic amendment to the energy bill to require better mileage for new gas-guzzling sport utility and other vehicles.

Illinois Sen. Dick Durbin had proposed that the standards be revised to boost the fuel economy of passenger cars to 40 miles per gallon (mpg) by 2016, and sport utility vehicles to 27.5 mpg. The proposal was defeated.


Last month, the Bush administration proposed a modest increase for sport utility vehicles and mini-vans to 22.2 miles per gallon (mpg), from 20.7 mpg required in the 2005-7 model years. The plan was criticized by environmental groups and many Democrats for not going far enough to rein in oil consumption.

The president of the AAA motorists group told the Senate Energy Committee that Hurricane Katrina is a wake-up call for stricter mileage standards.

"If we do not reduce our dependency on fossil fuel or increase our access to a reliable source of it -- or both -- the narrow margin we rely on for stability will continue to erode," AAA President Robert Darbelnet said.

Darbelnet said Congress should require better mileage than the proposal issued two weeks ago by the Bush administration.

"We would prefer to see automakers commit to this challenge voluntarily, but if they are unwilling to do that, Congress should require improvements," Darbelnet said. The AAA has previously advocated stricter mileage standards for new vehicles.

Katrina rocked the U.S. energy industry by knocking more than a half-dozen Gulf Coast refineries out of production, and halting most crude oil production in the Gulf of Mexico. Several major pipelines that carry gasoline and crude oil to other regions were also out of commission for several days because of lack of electricity.

Lawmakers, back at work on Tuesday after a month vacation, were quick to express concern at gasoline sticker shock.

"It seems to me that the FTC is not aggressively enough pursuing the matter of price gouging," Republican Sen. Gordon Smith of Oregon said.

"We are going to pursue this on the Commerce Committee," Smith said. "If they (the FTC) don't have the authority (to investigate fuel profiteering), they're going to get it."

The AAA also urged Congress to require the Environmental Protection Agency to modify its testing procedures to accurately reflect real-world driving conditions when setting miles per gallon averages.