02-02-2002
CONGRESS: Gas Mileage: Deal Maker or Breaker?
Fifteen hundred members of the United Auto Workers descended on Washington
this week for their union's annual legislative conference, thereby
allowing the UAW to mount a massive in-person lobbying campaign aimed at
persuading the Senate to protect the interests of U.S. automakers. As UAW
members were swarming Capitol Hill, the majority staff of the Senate
Commerce, Science, and Transportation Committee was attempting to hammer
out an energy bill toughening fuel-efficiency standards for cars and
SUVs.
The UAW fears that stiffening those requirements, formally known as
corporate average fuel economy (CAFE) standards, would overburden U.S. car
manufacturers who are already feeling the pinch of the national economic
downturn. Ford Motor Co., for example, recently announced plans to lay off
35,000 workers and close five plants.
But the recession is not the only issue reshaping the energy debate, which
shifted to the Senate after the House passed an energy bill last year.
Environmental lobbyists say that national security fears triggered by
September 11 are causing more lawmakers to look for ways to cut oil
imports from the Middle East and other unstable regions. Even some
Republicans who have long opposed toughening CAFE standards are
considering that approach as a way to curb American gasoline consumption.
U.S. oil imports "aren't just looked at as a vulnerability
anymore," said David Hamilton, director of state and federal policy
at the Alliance to Save Energy. "Now they're a national
threat."
At the same time, however, the energy debate has taken on strong new
political overtones because Sen. John F. Kerry, D-Mass., who is a
potential Democratic presidential contender, is forcefully attacking
President Bush's pro-industry energy policies. Senate Majority Leader
Thomas A. Daschle, D-S.D., is also trying to play the energy card against
Bush.
The President has consistently opposed increasing fuel-economy standards
for cars and SUVs. His national energy strategy, which was released in May
and largely adopted by the House in August, pushes for greater oil and gas
drilling and would provide few incentives for energy conservation. The
House rejected higher CAFE standards. But many lobbyists and congressional
staff members say that White House control over the energy debate has been
undercut by Enron Corp.'s growing financial problems and by the public's
growing concerns about allegations that Vice President Dick Cheney allowed
Enron and other energy industry giants to essentially dictate much of the
Administration's energy strategy. In Congress, committee investigations
into Enron's collapse have eaten up staff time and forced the Senate
Commerce Committee to postpone a hearing on CAFE standards.
Despite growing support across party lines in the Senate for stricter
efficiency standards, continued opposition by the auto industry and its
congressional supporters significantly reduces the odds that Congress will
actually pass an energy package this year. Citing the CAFE dispute and
standoffs over several other energy proposals, many industry lobbyists and
Capitol Hill staffers give the legislation only a 50-50 chance of making
it to the President's desk.
Environmentalists predict that opponents of higher CAFE standards are
likely to try to block Senate passage by filibustering. Conservative
Republican opponents of efficiency standards know they can count on the
votes of Democratic Senators from Michigan and other Midwestern states
where cars and car parts are manufactured.
Meanwhile, filibuster threats are also looming over the Republican
proposal to allow drilling in Alaska's Arctic National Wildlife Refuge.
Sens. Kerry and Joe Lieberman, D-Conn., have vowed to block any energy
bill that includes drilling there. Sen. Ted Stevens, R-Alaska, counters
that he will filibuster any bill that doesn't allow drilling in the
refuge.
Even if the Senate passes legislation that includes increased CAFE
standards but bars drilling in the Alaska refuge, the energy package would
face tough going in a House-Senate conference committee. After all, the
House energy package excludes fuel-efficiency standards and gives a green
light to the Alaskan drilling provision.
"You'd have a very round peg coming out of the Senate trying to fit
into a very square hole in the House," said Daniel F. Becker,
director of the Sierra Club's global-warming and energy program. "It
would be a real challenge to make the two fit."
Currently, automakers are required to meet an average efficiency standard
of 27.5 miles per gallon for all the new cars they sell in the United
States and 20.7 mpg for light trucks. The latter category includes SUVs,
which now constitute half of the passenger vehicles sold in the United
States. U.S. auto companies regularly fail to meet the CAFE standards,
while American Honda Motor Co. and Toyota Motor Co. usually exceed the
fuel mandates because they sell mostly small cars and are already using
more-efficient technologies. Because of opposition from Detroit, CAFE
standard haven't been increased since the 1980s.
Lobbyists close to the Senate Commerce Committee's negotiations say that
Democrats recently floated the idea of raising fuel-efficiency standards
to between 30 mpg and 39 mpg over a 10-to-12-year span. A July 2001
National Academy of Sciences report said such increases are feasible using
existing technology.
The committee's present draft rejects a UAW fuel-efficiency plan under
which all carmakers would be required to increase their fleet's efficiency
by the same percentage. That approach was opposed by committee Republicans
as unfair to Honda and Toyota, which already exceed current CAFE
requirements.
The UAW argues that Congress should give more weight to the needs of the
U.S. car companies, which employ UAW members, than to those of Honda and
Toyota, which run non-union shops. "It's important that these
standards are economically feasible. And by that we mean something that
doesn't cause economic hardship," said Alan Reuther, legislative
director of the UAW.
Honda favors an across-the-board increase in the CAFE standards. Ford,
General Motors Corp., DaimlerChrysler Corp., and Toyota are part of an
industry alliance that opposes any increase in the fuel-efficiency
standards. The U.S. automakers assert that instead of hiking CAFE
standards, which would force car companies to invest more in modernizing
the current generation of internal combustion engines, Congress should
fund more-futuristic research projects, such as the Bush Administration's
hydrogen-powered fuel-cell car project, which was announced by Energy
Secretary Spencer Abraham in early January at the Detroit auto show. But
the industry's critics argue that although fuel cells may have long-term
promise, they can do nothing to immediately lessen the nation's growing
appetite for oil.
The Big Three U.S. automakers now argue that fuel standards should be set
by the Transportation Department's National Highway Traffic Safety
Administration. However, during the Clinton Administration, they
successfully lobbied Congress to block funding that would have allowed the
NHTSA to draft new efficiency standards.
Under Bush, NHTSA has been reluctant to crack down on the auto industry.
The Administration recently announced that it would not raise the
fuel-efficiency requirements for SUVs and other light trucks built in
2004. But Administration officials have hinted that they might be willing
to raise the standards for those made in 2005.
Meanwhile, other Administration officials-notably John Graham, who heads
the Office of Management and Budget's powerful Office of Information and
Regulatory Affairs-have suggested overhauling the CAFE standards to allow
automakers to trade fuel-efficiency "credits," a controversial
move that would require congressional approval.
Energy legislation became a top priority for Washington early in Bush's
first year, when he called for a national energy strategy to help solve
California's electricity crisis. Cheney's energy task force developed a
largely supply-side national energy strategy, which recommended increasing
U.S. oil and natural-gas drilling throughout the United States, including
in the Alaska wildlife refuge. The measure rejected tougher CAFE standards
but called for more reliance on nuclear power. In August, the
Republican-controlled House adopted the Administration's energy package
and added $34 billion in tax benefits-$27 billion for the coal, oil,
natural gas, and nuclear power industries, and the other $7 billion
earmarked for energy-efficiency and conservation programs.
The Democratic-controlled Senate has started from scratch in developing
its national energy strategy. Released on December 5 by Daschle and Senate
Energy and Natural Resources Committee Chairman Jeff Bingaman, D-N.M.,
that bill would provide incentives for building a natural-gas pipeline
from northern Alaska to the lower 48 states but would not allow oil
development in the Alaskan wildlife refuge. It would give the Federal
Energy Regulatory Commission more power to streamline state electricity
deregulation and would push the White House to develop a plan for curbing
emissions of the greenhouse gases linked to global warming.
Daschle has promised to bring energy legislation to the Senate floor
before the Senate break that begins on February 18. (The CAFE provision,
however, is being handled separately by the Senate Commerce Committee and
will be added to the Daschle package.) Daschle's bill would also include
tax breaks for industry but would provide more funds than the House wants
for alternative energy and energy-efficiency projects. The Daschle tax
breaks would likely total $10 billion to $15 billion. Like the CAFE
provision, the tax breaks are set to be added to the energy package on the
Senate floor.
Supporters of the fuel-efficiency standards argue that increasing them is
one of the only ways of reducing U.S. gasoline use. "CAFE has been
the single most effective energy policy this nation has ever had in saving
gasoline," said Hal Harvey, president of the Energy Foundation, which
supports renewable energy projects. "There is literally no other
policy that the United States can enact that would have remotely the same
impact as CAFE in the next decade or two, except possibly [steep]
European-level gasoline taxes. And the political prospects of a gas tax
are zero."
The prospects of ratcheting up CAFE standards this year are not zero. In
fact, they are rising, but still are not high.
Margaret Kriz
National Journal
