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Bush leaves CAFE decision for Obama

Wed, 07 Jan 2009

The Bush administration has decided to punt its promised decision on new fuel economy standards to the Obama administration.

In a statement this morning, the U.S. Department of Transportation said it will not issue final rules for fuel economy standards for the 2011-15 model years as planned.

The recent financial difficulties of the automobile industry will require the next administration to conduct a thorough review of matters affecting the industry, including how to effectively implement" a new energy law requiring tougher standards, the statement said without attributing it to any individual.

The energy law, enacted in December 2007, requires standards to go up 40 percent by 2020 to a fleetwide average of at least 35 mpg.

Still some time left

The National Highway Traffic Safety Administration proposed a rule for the 2011-15 model years, raising standards by about 25 percent by the end of that period at an estimated cost of about $47 billion to the industry.

The Bush administration had promised a final rule by the end of 2008. But that was before the economic downturn reached crisis proportions for the automobile industry, necessitating federal loans to General Motors and Chrysler LLC to keep them afloat.

Federal law requires NHTSA to give automakers at least 18 months lead time before imposing higher standards under the corporate average fuel economy program, or CAFE.

So time remains for the Obama administration to impose higher standards for the 2011 model year -- which, under the CAFE program, begins Oct. 1, 2010.

The deadline for a final rule would be April 1.

The Bush administration statement added that it "has done significant work that will position the next transportation secretary to finalize a rule before the April 1, 2009, deadline."

President-elect Barack Obama has nominated former Rep. Ray LaHood, R-Ill., as the next secretary of transportation, who oversees NHTSA.

By Harry Stoffer- Automotive News