Auto makers seek first strike on climate

Auto companies are launching a pre-emptive strike against plans to limit greenhouse gas emissions from cars and trucks, setting up a powerhouse battle with oil producers.

The Big Three auto companies and the United Auto Workers have turned to Michigan’s Democratic senators to ensure the transportation provisions of a broad Senate energy and climate bill do not impose onerous restrictions on the auto industry.

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Michigan Democratic Sens. Debbie Stabenow and Carl Levin have been asked to establish a low-carbon requirement for fuels, which is a mandate fuel providers would have to meet, unlike the fuel efficiency requirements faced by automakers.

Stabenow and Levin have also been asked to codify federal authority to enact fuel efficiency standards beyond the existing authority that runs out in 2017 and to provide federal dollars for advanced vehicle technologies, which would benefit the industry.

The two senators have yet to offer specific language, but legislative language circulating on K Street is similar to a proposal made for the 2007 energy bill.

The auto industry has stepped up this effort partly out of concern with legislation introduced Thursday by four Democrats that would impose tougher fuel efficiency standards on the industry.

Auto companies hope the Stabenow-Levin language ends up in the final bill instead of the language hitting the auto industry. But their real plan might be to set off a fight among Democrats that could kill both ideas.

Senate Majority Leader Harry Reid (D-Nev.) is amenable to having a low-carbon fuel standard, according to sources, but may want to avoid infighting between Democrats and elect to drop both that and tougher fuel efficiency language from an already politically and substantively complicated broader debate.

Senate Democratic legislative aides discussed the low-carbon fuel standard Friday afternoon. Senate Republican leadership aides and the Alliance of Auto Manufacturers also discussed the idea in separate meetings Friday. The alliance represents 11 vehicle manufacturers, including Ford, General Motors, Chrysler and eight major foreign-owned companies.

The maneuvering by the auto industry has set off a fight with oil producers and other groups that oppose setting carbon restrictions on fuels.

The Consumer Energy Alliance will argue in TV, radio and print ads in four Midwestern states starting Tuesday that imposing carbon restrictions on the industry is too much on top of renewable fuel mandates fuel providers are already facing.

The roughly $1 million campaign by the coalition — which includes the five biggest U.S. oil companies, the U.S. Chamber of Commerce, major airlines represented by the Air Transport Association and manufacturing and other energy-intensive groups especially prominent in the Midwest — will run in Michigan, Ohio, Indiana and Minnesota.

The auto industry is targeting legislation designed to eliminate foreign-oil dependence over the next 20 years that is backed by Sen. Jeff Merkley (D-Ore.) and three other Senate Democrats.

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Merkley’s bill requires the Environmental Protection Agency and the Transportation Department to use existing their authority to issue fuel efficiency rules from 2017 to 2030 that maximize “oil savings and greenhouse gas emission reductions.”

Merkley’s goal is that that would lead to fuel efficiency increasing annually between 6 to 7 miles per gallon. This is higher than the current 4 percent annual increases the Obama administration has sought in order to bring the average fuel efficiency for cars and light trucks up to just over 35 mpg by 2016.

His bill also would aim to maximize oil savings through increasing the fuel efficiency of medium- and heavy-duty vehicles, as well as non-road vehicles like airplanes, ships and bulldozers. It also offers financial help to communities, consumers and companies to increase the deployment of electric vehicles. The measure is co-sponsored by Sens. Tom Carper (D-Del.), Tom Udall (D-N.M.) and Michael Bennet (D-Colo.).

Sen. Richard Lugar (R-Ind.) has also introduced a plan — backed by centrist Republican Sens. Lindsey Graham (S.C.) and Lisa Murkowski (Alaska) — that sets long-term 4 percent annual increases in fuel efficiency standards and requires first-time standards for medium- and heavy-duty trucks to come into effect in 2017 and increase every four years.

The auto companies are arguing that they are meeting product requirements by adhering to fuel efficiency limits and that fuel suppliers need to do more to help limit vehicle greenhouse gas emissions.

The low-carbon fuels standard is not a new idea. Sens. Ron Wyden (D-Ore.) and Lamar Alexander (Tenn.) — the third-ranking Senate Republican — have touted it in recent years. President Obama also introduced a bill when he was a U.S. senator, and pushed the idea on the presidential campaign trail as well.

It was originally part of a House climate and energy package, but was yanked before the bill was given final approval.

While several newer draft versions have been circulating, language from an industry draft that was pushed in energy legislation dating back to 2007 established a fuel standard in 2017 and sought incrementally tougher restrictions thereafter.

The Environmental Protection Agency — with help from the Energy Department — would set the standard, which would affect refiners and all other non-retail fuel suppliers. That draft — still circulating recently in legislative and lobbying circles — would also have set up a trading program that allows fuel providers to earn and trade emission credits.