At issue is the federal government's twin towers of regulation power — the National Highway Transportation and Safety Administration (NHTSA) and the Environmental Protection Agency (EPA). What President Obama announced Tuesday was that the EPA and NHTSA intend to work together to regulate greenhouse gas (GHG) emissions and corporate average fuel economy (CAFE) standards at the national level. This avoids different standards being implemented at the state versus federal level, and to avoid unharmonized or inconsistent GHG emission and CAFE standards.

The problem is, as has been widely reported by everyone in the media, ourselves included, NHTSA is not proposing a 35.5 MPG CAFE standard by model year 2016. Rather, as we're now being told by analysts at Credit Suisse, the EPA intends to propose GHG emission standards that, based on its estimates of model year 2016 light vehicle sales at that time, would result in fleet average CO2 emissions (of vehicles sold in that model year) of roughly 250 grams/mile. This creates at least one huge loophole in the system for automakers to take advantage of.

The Air Conditioner Loophole
That level of CO2 emission per mile would equate to about 35.5 MPG in fuel economy parlance. However — here's the big loophole — it's expected by the EPA and NHTSA that most manufacturers would apply air conditioning improvements to reduce GHG emissions. Air conditioning improvements do not enter into the NHTSA's calculation of MPG fuel economy.

Thus, the improvement in MPG that is equivalent to the estimated 250g of CO2/mile will actually fall well short of the 35.5 MPG mark. The gap between what the fleet CAFE will be and the widely reported 35.5, would be made up by air conditioner improvements. So basically, when you buy your supposedly more-fuel-efficient vehicle in 2016, it won't have as high of a fuel economy as it could — thanks to your car's air conditioning.

Automakers Get Lower Standards The More Large SUVs, Trucks They Build
Credit Suisse also points out in a new report released today that another key component of the proposal yesterday is that the EPA and NHTSA both intend to propose separate footprint-based standards. This is consistent with NHTSA's current approach to CAFE standards and, as such, means that there will be no set standard, with respect to either CO2 or fuel economy, for any single manufacturer or in fact for the fleet as a whole. Any standards you hear about for a given manufacturer or for the fleet as a whole are estimates.

This is because the actual MPG or CO2 "standard" for every manufacturer will vary depending on what they build. Footprint-based means the amount of CO2 emitted and the level of fuel economy will vary depending on the vehicles wheelbase multiplied by its track width. Put another way, the area between where the tires touch the road.

This quote from the proposal addresses the implications for automakers: "Under a footprint-based standard, each manufacturer would have a GHG and CAFE standard unique to its fleet, with a separate standard for passenger cars and light-trucks, depending on the footprints of the vehicle models produced by that manufacturer. Generally, manufacturers of larger vehicles (i.e. vehicles with larger footprints) would face less stringent standards (i.e., higher CO2 grams/mile standards and lower CAFE standards) than manufacturers of smaller vehicles." This clearly favors the domestic makers.

Will That Be Cash Or Credit?
The EPA and NHTSA foresee flexibility in compliance with its proposed standards based on certain credits. Credits can be earned for fleet over-compliance in a given year, and applied in future years. Current consideration is to allow credits to be carried forward for at least 5 years.

In addition to credits at the fleet level that could be carried forward, the agencies intend to consider giving manufacturers the ability to transfer credits among its fleet. That is, if an automaker achieves over-compliance on the car side, it can transfer those credits to the truck side, and vice versa.

Air conditioning credits: AC units contribute to GHG emissions in two ways. First, through the leakage of hydrofluorocarbon (HFC) refrigerants, and second, by placing additional load on the engine, which causes the engine to produce additional CO2. The EPA is considering an approach that would enable automakers to earn credits by reducing GHG emissions (HFC and CO2) related to AC systems. Under the approach, reductions in HFCs would be converted to a CO2 equivalent reduction on a gram/mile basis that could be used as credits in meeting fleet CO2 standards. The EPA said it believes automakers would reduce HFC and CO2 emission through AC upgrades in order to take advantage of these credits.

Additional credit opportunities are being considered to help promote the commercialization of electric and plug-in hybrid electric vehicles. They are called "super credits", and they would take the form of a multiplier such that the number of hybrid/electric vehicles sold would count as more than one vehicle in the manufacturer's fleet average. Thus helping automakers achieve fleet compliance by offering such vehicles, and applying those credits as needed.

Who Comes Out On Top?
All of this doesn't mean the automakers won't have to make an improvement. There's still much work to be done to bring all the vehicles up to these standards, but as we learn more it becomes clearer why so many auto execs were willing to stand behind President Obama.

[Credit Suisse, EPA, Green Car Advisor]

Using the Model-Year 2009 Fleet Fuel Economy standards provided by the National Highway Safety Transportation Administration (NHTSA), we determined the current ratings for passenger cars and light trucks and compared them to the goal for each of the major automakers selling cars in the U.S. A few automakers, like KIA and Hyundai, report their data separately because of a different ownership arrangement. We also took a look at what barriers exist for them reaching those standards.

UPDATE: The Obama Administration contacted us to tell us the originally reported numbers of 42 MPG for cars and 27 MPG for light trucks were wrong. Instead, they're requiring an average of 39 MPG for cars and 30 MPG for light trucks. We've made the proper adjustments but even with these different numbers no one meets either requirement.

BMW

2009 Fleet Fuel Economy Rating: 27.5 MPG
Distance From 2016 Fleet Fuel Economy Rating: -11.5 MPG
2009 Light Truck Fleet Fuel Economy Rating: 23.1 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -6.9 MPG
Barriers To Meeting New Fuel Economy Ratings: BMW currently offers no hybrid or electric vehicles and, as a matter of practice, has been increasing displacement not decreasing it. The use of diesel engines is a step in the right direction but they're well behind where they need to be.

Chrysler

2009 Fleet Fuel Economy Rating: 28.3 MPG
Distance From 2016 Fleet Fuel Economy Rating: -10.7 MPG
2009 Light Truck Fleet Fuel Economy Rating: 23.9 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -6.1 MPG
Barriers To Meeting New Fuel Economy Ratings: Chrysler's biggest problem, in general, is the lack of appealing small cars with good fuel economy. Lacking any realistic vehicle on the horizon, the Chrysler-FIAT deal was envisioned to solve this issue. Let's see how that works out for them.

Daimler

2009 Fleet Fuel Economy Rating: 27.5 MPG
Distance From 2016 Fleet Fuel Economy Rating: -11.5 MPG
2009 Light Truck Fleet Fuel Economy Rating: 20.6 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -9.4 MPG
Barriers To Meeting New Fuel Economy Ratings: Mercedes-Benz may have to reconsider its policy of bringing over G-wagens and GL-wagens if it doesn't want to pay a fine, as the light truck numbers are low. The company has hinted at a smaller, possibly electric, model to bring up the average mileage but how many electric smarts do you need to outweigh an AMG G55?

Ford

2009 Fleet Fuel Economy Rating: 31.1 MPG (excluding foreign import)
Distance From 2016 Fleet Fuel Economy Rating: -7.9 MPG
2009 Light Truck Fleet Fuel Economy Rating: 24.7 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -5.3 MPG
Barriers To Meeting New Fuel Economy Ratings: Ford sells a lot of trucks. Despite fluctuations in fuel prices, the F-Series is bread + butter for the company. The addition of EcoBoost should help propel passenger vehicles to a higher overall value, and rumors of similar turbo'ed engines in the pickups should help as well.

GM

2009 Fleet Fuel Economy Rating: 31.3 MPG (excluding foreign import)
Distance From 2016 Fleet Fuel Economy Rating: -7.7 MPG
2009 Light Truck Fleet Fuel Economy Rating: 22.5 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -7.5 MPG
Barriers To Meeting New Fuel Economy Ratings: Barriers? What Barriers? The Volt will save everything... right? GM could be a victim of its own success if it turns out they start selling far more Camaros than hybrids and other fuel efficient vehicles.

Honda

2009 Fleet Fuel Economy Rating: 36.5 MPG
Distance From 2016 Fleet Fuel Economy Rating: -2.5 MPG
2009 Light Truck Fleet Fuel Economy Rating: 26.2 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -3.8 MPG
Barriers To Meeting New Fuel Economy Ratings: Honda typically ranks highest among brands, so they're doing pretty well. But maybe now we know why they keep delaying the NSX.

Hyundai

2009 Fleet Fuel Economy Rating: 33.2 MPG
Distance From 2016 Fleet Fuel Economy Rating: -5.8 MPG
2009 Light Truck Fleet Fuel Economy Rating: 25.7 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -4.3 MPG
Barriers To Meeting New Fuel Economy Ratings: Unlike most Asian brands, Hyundai has picked up steam by moving away from greener vehicles. WIll the Genesis sedan and coupe cut into the gains made by their dinky little Korean hatches?

Kia

2009 Fleet Fuel Economy Rating: 33.7 MPG
Distance From 2016 Fleet Fuel Economy Rating: -5.3 MPG
2009 Light Truck Fleet Fuel Economy Rating: 24.4 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -5.6 MPG
Barriers To Meeting New Fuel Economy Ratings: Kia has one big barrier to better fuel economy and it's the Kia Borrego. Since no one seems to want the $40K truck we don't see Kia having a hard time cutting it out of the lineup.

Mazda

2009 Fleet Fuel Economy Rating: 32.2/31.0 MPG (Import/Domestic)
Distance From 2016 Fleet Fuel Economy Rating: -6.8 MPG/8.0 MPG
2009 Light Truck Fleet Fuel Economy Rating: 26.6 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -3.4 MPG
Barriers To Meeting New Fuel Economy Ratings: The only hybrid vehicle in the Mazda lineup is a rebadged Ford Escape and, so far as we know, diesel hasn't been considered an option. While the Mazda3 gets good mileage it's always placed Zoom-Zoom over glug-glug.

Mitsubishi

2009 Fleet Fuel Economy Rating: 29.5 MPG
Distance From 2016 Fleet Fuel Economy Rating: -9.5 MPG
2009 Light Truck Fleet Fuel Economy Rating: 26.1 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -3.9 MPG
Barriers To Meeting New Fuel Economy Ratings: The one saving grace for Mitsubishi, as it languishes in the U.S., is the iMiev electric car. But can the company produce enough electrics and hold out long enough to make it economically feasible?

Nissan

2009 Fleet Fuel Economy Rating: 30.1/34.0 MPG (Import/Domestic)
Distance From 2016 Fleet Fuel Economy Rating: -8.9 MPG/ 5.0 MPG
2009 Light Truck Fleet Fuel Economy Rating: 23.5 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -6.5 MPG
Barriers To Meeting New Fuel Economy Ratings: Nissan has built a reputation around their VQ V6 and don't seem intent on taking it out of any of their vehicles. To balance this, they'll try to use the Nissan Cube and other small cars, but they'll have to do better than the also-ran Sentra

Porsche

2009 Fleet Fuel Economy Rating: 27.0 MPG
Distance From 2016 Fleet Fuel Economy Rating: -12.0 MPG
2009 Light Truck Fleet Fuel Economy Rating: 19.3 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -10.7 MPG
Barriers To Meeting New Fuel Economy Ratings: Porsche has historically been more content to pay fees than reform their ways given they're a performance brand. The profitable Cayenne, as well, presents a challenge. They could combine with VW to raise the Porsche average, but at the price of lowering VW's.

Subaru

2009 Fleet Fuel Economy Rating: 29.0 MPG
Distance From 2016 Fleet Fuel Economy Rating: -10.0 MPG
2009 Light Truck Fleet Fuel Economy Rating: 28.4 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -1.6 MPG
Barriers To Meeting New Fuel Economy Ratings: Subaru builds cars disproportionately more fun than you'd expect and the popularity of vehicles like the WRX and the lack of a small, under-powered economy car is a threat to the brand's overall mileage. Could we see the return of the Justy hatchback?

Suzuki

2009 Fleet Fuel Economy Rating: 32.7 MPG
Distance From 2016 Fleet Fuel Economy Rating: -6.3 MPG
2009 Light Truck Fleet Fuel Economy Rating: 25.7 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -4.3 MPG
Barriers To Meeting New Fuel Economy Ratings: The current Suzuki lineup is so random and confusing it's hard to know where they could go. With the exception of the SX4 and Grand Vitara there aren't any products with much name recognition. Just scrap the whole thing and bring us the Cappuccino.

Toyota

2009 Fleet Fuel Economy Rating: 38.1/35.9 MPG (Import/Domestic)
Distance From 2016 Fleet Fuel Economy Rating: -0.9 MPG/3.1 MPG
2009 Light Truck Fleet Fuel Economy Rating: 25.8 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -4.2 MPG
Barriers To Meeting New Fuel Economy Ratings: Unless Toyota discontinues the Prius and decides to make the Tacoma V8-only, the automaker is moving in the right direction. Let's just hope this doesn't torpedo plans for a new Supra although we fear it might.

VW

2009 Fleet Fuel Economy Rating: 30.2 MPG
Distance From 2016 Fleet Fuel Economy Rating: -8.8 MPG
2009 Light Truck Fleet Fuel Economy Rating: 23.9 MPG
Distance From 2016 Light Truck Fuel Economy Rating: -6.1 MPG
Barriers To Meeting New Fuel Economy Ratings: Volkswagen's greatest environmental asset is the TDI engine. It's greatest weakness is the high price of diesel fuel and the possibility of Americans turning on their technology. The greatest barrier on the horizon is Porsche, so we can't imagine them combining.

Conclusion

Not a single automaker currently meets 2016 standards for fuel economy. In passenger cars, only Toyota and Honda, who have larger fleets of fuel-efficient cars are less than 10 MPG away from the proposed standards. This means companies will either have to radically alter their lineups, reduce the production of vehicles we actually want to drive, or invest heavily in alternative propulsion systems at a time when their capital is severely constrained. Good luck with that! Appliance vehicles, here we come!

In his opening, President Obama framed the historic moment by pointing out the gathering of auto executives, governors, legislators, environmental activists and others historically at odds with each other. He failed to mention the reason everyone is so happy to get together is that he has a gun to their heads in the form of government funding.

The goal of a new national standard is a mixed bag for automakers. On one hand, lawsuits and state standards are being dropped and the EPA and Department of Transportation standards are being combined. Obama also mentioned the increase in fuel economy will provide a savings for consumers over the life of a car and save 1.8 billion gallons of fuel.

On the other hand, helping determine what automakers should build does not create demand. Lots of fuel-efficient cars are out there today but most consumers aren't interested. CAFE doesn't deal with the demand side of the equation. We can continue forcing automakers to build fuel-efficient cars that nobody wants to buy, but unless we're willing to enact a higher fuel tax (with obvious progressive checks in place to deal with lower-income car owners) to out-price SUVs and pickup trucks, consumers won't change their habits.

But the details? Ah yes, the details — a 5% annual increase in average fuel economy from 2011, culminating in 35.5 MPG in 2016. The breakout will be 39 MPG for cars and 30 MPG for trucks. So basically, unless you're an automaker building an appliance, get out of the game. There's no room for a Corvette ZR1 or rear-wheel-drive power wagon. Nope, it's all going to be Priuses and Fusion hybrids from here on out. We'd move to Canada except we're assuming it'd be worse up there. Maybe Mexico is the place to go.

Details of the plan are still vague, but it looks as though it will standardize both tailpipe-emissions and CAFE mileage standards so carmakers won't have to worry about meeting numerous and sometimes conflicting goals. We're being told auto executives from around the world plan to fly their private jets to Washington for the purposes of gathering 'round Obama and singing Kumbaya.

Because if this works, Obama will succeed where no president has before — do exactly what every auto exec's asked for from administrations for decades while simultaneously making them all his bitch. [Politico]

Photo: Scott Olson/Getty Images

The Obama administration's 2011 model year standard will require the nation's cars and trucks to meet a fleet average Corporate Average Fuel Economy (CAFE) of 27.3 MPG — that's 8 percent above the 2010 model year requirement of 25.3 MPG, an administration official confirmed Thursday night. The regulations for the 2011 model year are final.

But wait, there's more.

The Obama administration opted to finalize only the 2011 model year standards partly due to a requirement under a 2007 energy law to wrap up those regulations by Tuesday. Administration officials will spend the next year reviewing the 2012-15 model years as they seek a comprehensive emissions policy.

So what does this mean — can automakers reach those targets? In a word, yes. We'll let David Shepardson from The Detroit News explain:

The increase in fuel economy requirements for passenger cars is the first since Congress created the CAFE program in 1975. In the wake of the Arab oil embargo, it ordered automakers to boost fuel efficiency from 13 mpg to 27.5 mpg over a decade

Automakers have outstripped the federal requirements, making it easier in the short run for them to meet the new requirements. In the 2007 model year, automakers averaged 31.3 mpg for passenger cars, and 23.1 mpg for light trucks, above the 22.2 mpg mandate.

But the next two model years are not where this story ends — the Obama administration's expected to decide before May whether to give California and 13 other states permission from the EPA to impose a requirement of a 30% decrease in tailpipe emissions by 2016. If that regulation goes through, it would have the effect of a fleetwide fuel economy of 34.5 MPG by 2015. Yay! We all get to drive econoboxes! [Detroit News]

Photo Credit: Justin Sullivan / Getty Images News

Said the NRMA president, "For too long, Australia's automotive industry has been allowed to play by its own rules, setting paltry voluntary targets and consistently building and importing cars that consume more fuel than their overseas counterparts." That's ridiculous; voluntary standards always work... [Drive.com.au]

Jackson sees the latest fuel crisis as a two-pronged beast: On one hand, sustained higher fuel prices will drive consumers (and manufacturers) to more fuel-efficient vehicles, eventually reducing our consumption of oil and improving national security. On the other hand, high gas prices are dragging down the economy, wrecking his profits, and generally suck.

However, Jackson is taking a refreshingly long-term view of the situation, and concluding that the country, its citizens, and its businesses (his included) will be fundamentally better off in the end by learning to cope with high energy costs. Given that the OPEC supply wildcard has been supplanted by the much less predictable speculator wildcard this time around, plus China proving it has an appetite to match our own, a long-term view may be the only right answer.

But Jackson acknowledges that if energy prices change, all bets are off. "I'm a good car salesman," Mr. Jackson says. "If I have high gas prices and an open-minded consumer, it's very doable. There is a connection between their needs and what we have to offer them. If we have cheap gasoline, it's mission impossible."

In other words, take your medicine, kids. It doesn't taste good, but you'll feel better tomorrow. Now pardon me, but I'm off to drive my G-Wagen. The beatings begin in five, four, three...
[WSJ.com]

For one thing, he's arguing against some of GM's most profitable core products, trucks and SUVs. Filling the void are smaller rides that get better mileage and presumably square the profit-loss circle by allowing for higher pricing based on new technologies (small cars have been out of favor in Detroit for a while now because they represent such meager profits—trucks and SUVs are obviously a different story).

It's sneaky, but to us it sounds like Lutz is positioning the consumer squarely between GM and the government. The economic environment of 2020 consists of inflated gas prices and more expensive, but smaller, vehicle choices. Trucks and SUVs have...well, apparently vanished from the scene.

Could this be interpreted as an attack on the CAFE objectives? This wouldn't be anything new for Lutz, who has dissed CAFE in the past. For any politician within earshot, the message is obvious: 35mpg CAFE=inflation in not one but two key economic sectors. Consumers won't like it, and Lutz knows it.

[MarketWatch]

FORD TO EQUIP HALF A MILLION VEHICLES WITH ECOBOOST ENGINE TECHNOLOGY FOR UP TO 20% BETTER FUEL ECONOMY

DETROIT, Jan. 6, 2008 - Ford Motor Company is introducing a new engine technology called EcoBoost that will deliver up to 20 percent better fuel economy on half a million Ford, Lincoln and Mercury vehicles annually in North America during the next five years.

The EcoBoost family of 4-cylinder and 6-cylinder engines features turbocharging and direct injection technology. Compared with more expensive hybrids and diesel engines, EcoBoost builds upon today's affordable gasoline engine and improves it, providing more customers with a way to improve fuel economy and emissions without compromising driving performance.

"EcoBoost is meaningful because it can be applied across a wide variety of engine types in a range of vehicles, from small cars to large trucks - and it's affordable," said Derrick Kuzak, Ford's group vice president of Global Product Development.

"Compared with the current cost of diesel and hybrid technologies, customers in North America can expect to recoup their initial investment in a 4-cylinder EcoBoost engine through fuel savings in approximately 30 months. A diesel in North America will take an average of seven and one-half years, while the cost of a hybrid will take nearly 12 years to recoup - given equivalent miles driven per year and fuel costs," he said.

Ford will introduce EcoBoost on the new Lincoln MKS flagship in 2009, followed by the Ford Flex and other vehicles. By 2013, Ford will have more than half a million EcoBoost-powered vehicles on the road annually in North America.

In 2009, Ford first will introduce EcoBoost on the Lincoln MKS featuring a 3.5-liter twin-turbocharged V-6. It will produce the power and torque of a V-8 engine with the fuel efficiency of a V-6. In fact, with an estimated 340-horsepower and more than 340 lb.-ft. of torque, the Lincoln MKS will be the most powerful and fuel-efficient all-wheel-drive luxury sedan in the market.

More With Less
EcoBoost's combination of direct injection and turbocharging mitigates the traditional disadvantages of downsizing and boosting 4- and 6-cylinder engines, giving customers both superior performance as well as fuel economy.

With direct injection, fuel is injected into each cylinder of an engine in small, precise amounts. Compared to conventional port injection, direct injection produces a cooler, denser charge, delivering higher fuel economy and performance.

When combined with modern-day turbocharging - which uses waste energy from the exhaust gas to drive the turbine - direct injection provides the best of both worlds: the responsiveness of a larger-displacement engine with fewer trips to the gas pump.

Ford's 3.5-liter EcoBoost V-6, for example, can deliver upwards of 340-plus lb.-ft. of torque across a wide engine range - 2,000 to 5,000 rpm versus 270 to 310 lb.-ft of torque for a conventional naturally aspirated 4.6-liter V-8 over the same speed range. At the same time, this V-6 gives customers an approximate 2 mpg improvement and emits up to 15 percent fewer CO2 emissions to the environment.

Direct injection coupled with turbocharging allows for the downsizing of engines that deliver improved torque and performance. A small 4-cylinder EcoBoost engine has the capability of producing more torque than a larger 4-cylinder engine - nearly an entire liter larger in displacement - with better fuel efficiency.

The real-world fuel economy benefit is consistent no matter the drive cycle, meaning the engine is efficient in the city as well as on the highway - unlike hybrids, which are most efficient in stop-and-go traffic. In addition, customers who tow and haul - and have long turned to more expensive diesel powertrains for their superior towing capabilities - can find the engine performance they need from an EcoBoost powertrain.

EcoBoost - combined with multi-speed transmissions, advanced electric power steering, weight reductions and aerodynamic improvements - is part of Ford Motor Company's strategy to deliver sustainable, quality vehicles that customers want and value. Additional hybrid offerings and diesel engines are planned for light-duty vehicles.

Longer term, Ford plans to remain aggressive in the development of plug-in hybrids and hydrogen fuel cell-powered vehicles.

"We know that what will make the biggest difference is applying the right technology on volume vehicles that customers really want and value and can afford," said Kuzak. "EcoBoost puts an affordable technology within reach for millions of customers, and Ford's systems approach adds up to a big idea that differentiates Ford's sustainability strategy in the market."
[Source: Ford]

The state was attempting to implement mandatory standards that would slash greenhouse gas emissions from cars and trucks by 30%. The legislation would have come into effect in 2016, four years before the new national 35mpg fuel economy standard. 16 other states were prepared to follow suit.

The EPA decided to block California, citing the 2020 35mpg standard signed into law last week as "a clear national solution," and that there was no need for a "confusing patchwork of state rules to reduce America's climate footprint from vehicles."

The Guardian reports that Bush appointee Stephen Johnson, the EPA's director, cut himself off from consultation for a month prior to the decision being announced, a move that itself came after Cheney met with members of the auto industry. Johnson's staff had previously warned him that should he block California's decision, the state would most likely win a lawsuit against the agency. Upon announcing his intention to go against that advice, Johnson tasked his staff with creating a legal justification for it.

California's Attorney General immediately announced the State's intention to pursue the matter in court, saying ""It is completely absurd to assert that California does not have a compelling need to fight global warming by curbing greenhouse gas emissions from cars. There is absolutely no legal justification for the Bush administration to deny this request - Gov. Schwarzenegger and I are preparing to sue at the earliest possible moment."

The New York Times described the decision in an editorial as being, "an indefensible act of executive arrogance that can only be explained as the product of ideological blindness and as a political payoff to the automobile industry." [Via The Guardian]

Photo credit: Scorpius73

Statement from Robert Nardelli, Chairman and CEO, Chrysler LLC, Regarding New, Nationwide U.S. Fuel Economy Standards:

"We commend the Congress for passing an energy bill today and we fully support it being signed into law. Chrysler is committed to meeting the fuel economy standards of the bill and doing our part to reduce greenhouse gas emissions and our country's reliance on foreign oil. We continue to devote significant resources to develop quality, fuel efficient products that our customers expect. This year alone, we offer six vehicles that get 28 miles per gallon or better, and more are on the way." [Source: Chrysler]

The next step is to send the energy bill to the house for approval, which shouldn't be a problem, and then onto the President for his signature. The White House is happy with the bill, so that should be the ball game barring any unforeseen complications. To aid automakers, the bill includes language to spend 50% of fines collected from those in non compliance to help manufacturers adjust their manufacturing to meet the new reqs. Requirements that would make automakers attain multiple standards has also been stripped. All in all, it's about the best compromise we're going to get and a bill that I think that a majority will be happy with. [DetNews]

Hardigree popped open a worm can when he reported that President Bush — who has previously admitted that we are addicted to foreign oil — is probably going to to veto 35 mpg standards. This led Electoral College Dropout to muse:

Just like the catalytic converter would kill the auto industry, just like the seat belt was going to kill the auto industry, just like the air bag was going to kill the auto industry, just like...

If raising fuel economy to the levels of every other industrial nation is going to kill off the American auto industry maybe they should have been dead years ago.