DETROIT, Aug. 15 - The Bush administration is expected to abandon a proposal to extend fuel economy regulations to include Hummer H2's and other huge sport utility vehicles, auto industry and other officials say.
The proposal was among a number of potential strategies outlined by the administration in 2003 to overhaul mileage requirements for light trucks - sport utility vehicles, pickup trucks and minivans. It had been seen by industry officials as likely to be adopted.
But the impact of the tougher requirements would have been borne almost solely by the increasingly troubled domestic auto industry, a concern for the administration.
Its broad plan to overhaul the light-truck mileage rules would change the regulatory system from one using averaged mileage for an automaker's entire annual light-truck output to one that sets up five or six classes, determined by a vehicle's size.
The rules, the first major rewriting of fuel economy standards since they were created in the 1970's, will be released late this month. They are sure to renew vigorous debate about the nation's dependence on foreign oil, a matter underlined by rapidly rising oil and gas prices.
I am still so amazed at how Detroit's Big Three auto makers and the Bush administration still do not get it. When gas prices were cheap, the American public didn't care about fuel economy mileage and Detroit could get away with selling big SUVs with poor gas mileage and high profit margins. The Japanese auto industry certainly jumped on the big SUV bandwagon because of profit-rich market, but the Japanese also had to develop greater fuel efficiency cars to sell in their home market, and possibly the European market, where gas prices are almost twice that of the American market. Gas prices in Europe and Japan act as a C.A.F.E for the Japanese auto-makers. So now this last week, we've seen oil prices shoot up to $67 a barrel and the cheapest gas prices here in San Jose are around $2.67 a gallon (with $3.00 a gallon for the premium stuff). Guess what? Those big, gas-guzzling SUV owners are putting over $50 to fill up their tanks. Consider this in the Times:
Gasoline prices have become a powerful counterweight to regulatory benefits given the biggest gas guzzlers. Many automakers, seeing the weakness in sales of large S.U.V.'s this year - they have recovered only after heavy discounting - are re-emphasizing plans for smaller, lighter S.U.V.'s in the future.
And how is the Bush administration countering this issue? Continuing on:
Under the Bush administration plan, about half a dozen size classes will be determined by the vehicle's length and width. Instead of an overall mileage requirement for the total fleet of light trucks a manufacturer sells in a model year, makers will have to meet some kind of target or average within each size class. As a result of the proliferating categories, it will probably become more difficult to predict fuel economy trends.
The administration has taken some steps to increase fuel regulations for light trucks, raising the mileage standard for trucks to 22.2 miles a gallon for 2007 models, from 20.7 miles a gallon in 2004 models. Environmentalists have argued that gains from that move were offset by credits given to automakers for making vehicles that can use ethanol, even though there are few gas stations that carry the required blend.
Under the administration's plan, for 2008 to 2010 models automakers will have a choice of complying with the new size-based system or the current system, though a further increase beyond 22.2 miles a gallon is expected in the current system. After 2010, the current system will be eliminated.
So instead of C.A.F.E, we get this complicated, multiple vehicle-class system that will be voluntary to the auto industry. Meanwhile, the Japanese are already incorporating hybrid technology into their line of SUVs. Considering the American public's love for the SUVs and the success of the new Toyota Prius hybrid cars, guess what the American public's going to buy?
And Detroit will be left behind.
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