U.S. Energy Bill Raises Bar for Auto Fuel Efficiency

In late 2007, U.S. Congressional leaders reached agreement on, and President Bush signed into law on Dec. 19, a new energy bill that significantly raises fuel-efficiency standards for U.S. cars and trucks and mandates increased use of bio-fuels. The bill as passed adheres to the U.S. SenateÂ’s version, which requires

In late 2007, U.S. Congressional leaders reached agreement on, and President Bush signed into law on Dec. 19, a new energy bill that significantly raises fuel-efficiency standards for U.S. cars and trucks and mandates increased use of bio-fuels. The bill as passed adheres to the U.S. SenateÂ’s version, which requires that each automotive OEMÂ’s fleet of automobiles and light trucks achieve average fuel efficiency of 35 miles per gallon by 2020. That figure is about 40 percent higher than current fleet averages.

The final version of the bill had the approval of the auto industryÂ’s key congressional ally, Rep. John D. Dingell (D-Mich.) after he successfully requested that tougher standards be directed more toward for cars than light trucks. The bill also helps protect jobs at some U.S. auto plants, a priority issue for the United Auto Workers union.

Under the billÂ’s provisions, motor fuel refineries also will use increasing amounts of corn-based ethanol and, starting in 2013, increasing amounts of advanced bio-fuels derived from other feedstocks. The legislation also contains incentives for greater efficiency in electricity consumption. What the energy bill did not include was an extension of the production tax credit (PTC) for alternative energy development. The current PTC, which expires Dec. 31, 2008, is not permanent and must be renewed regularly by the U.S. Congress. Energy industry observers say the PTC has been at least partially responsible for encouraging the upswing in construction of wind farms across the U.S. in recent years. Following passage of the energy bill, the American Wind Energy Assn. (Washington, D.C.) said it would continue to work with Congress and the Bush Administration to renew the PTC beyond 2008.