Lawmakers reach gas mileage boost deal

( AP ) - An agreement among congressional Democrats - including those from auto industry states - to support a 40 percent increase in vehicle fuel efficiency is likely to be the tonic needed to push energy legislation through Congress before Christmas.

House Speaker Nancy Pelosi and Rep. John Dingell, D-Mich., a longtime protector of the auto industry, settled their differences in an agreement late Friday on the fuel economy, or CAFE, issue, clearing the way for a House vote on a broader energy bill, probably on Wednesday.

Automakers would be required to meet an industrywide average of 35 miles per gallon for cars and light trucks, including SUVs, by 2020, the first increase by Congress in car fuel efficiency in 32 years.

Senate Majority Leader Harry Reid of Nevada called the compromise "good news" and said he hoped to take up the legislation quickly after the House acts.

Dingell said the tougher standards are "both aggressive and attainable" and include provisions that give manufacturers the needed flexibility to bring SUVs and small trucks under compliance and to avoid job losses.

"We have achieved consensus on several provisions that provide critical environmental safeguards without jeopardizing American jobs," said Dingell in a statement.

Pelosi, D-Calif., said in a statement that the tougher CAFE requirements "will serve as the cornerstone" of the energy bill, which also is expected to require a sharp increase in ethanol use as a motor fuel and require nonpublic electric utilities to produce 15 percent of their power from renewable energy sources such as wind or solar energy.

The amount of ethanol required to be used as a motor fuel would be ramped up to 36 billion gallons a year by 2022, a sevenfold increase over today's production.

Dingell's support for the new CAFE requirements avoids what otherwise was almost certain to have been a contentious - some say "bloody" - floor debate over energy next week. Dingell, the longest serving member of the House and chairman of the Energy and Commerce Committee, likely would have been joined by a number of other Democrats in opposing the bill.

Instead, the legislation, while criticized by most Republicans, is expected have smooth sailing.

But the negotiations had as much to do with the Senate as the House.

The compromise quickly received the endorsement of senators who have long opposed increased fuel economy legislation, and whose support is viewed by Democratic leaders as essential if the energy bill is to get the 60 votes need to overcome an almost certain GOP filibuster.

Sen. Carl Levin, D-Mich., who strongly opposed the 35 mpg requirement when it passed the Senate in June, announced his support of the compromise.

It "will be challenging for auto manufacturers," he said. "(But) we got concessions on some of the most important issues."

Dingell had demand and won an extension of the use of so-called flex-fuel vehicles that run on 85 percent ethanol to offset some of the fuel efficiency increases until 2014 after which the program will be gradually phased out and eliminated in 2020. Automakers also are given greater flexibility in meeting new fuel efficiency for SUVs and pickups, and assurance of no "backsliding" on measures designed to protect U.S. auto industry jobs.

Still, the industry overall must achieve 35 mpg average, counting all vehicles, by 2020, compared with the current requirement of 27.5 mpg fleet average for cars - a level that has not increased since 1989 - and 22 mpg for SUVs, passenger vans and pickups.

"It is a major milestone and the first concrete legislation to address global warming," declared Sen. Dianne Feinstein, D-Calif., who was involved in the discussion with House Democrats as the agreement with Dingell was worked out.

The new requirements, which will be phased in over the next dozen years, "will offer the automobile industry the certainty it needs, while offering flexibility to automakers and ensuring we keep American manufacturing jobs and continued domestic production of smaller vehicles," said Pelosi.

House Republicans have strongly criticized the energy legislation, calling it the "non-energy bill' because it includes nothing to spur more domestic production of oil and natural gas or support for coal. Pelosi has responded, saying it was a "new direction" in energy away from fossil fuels toward more support for renewables and energy efficiency.

But to get the bill through the Senate - and also avoid a threatened veto by President Bush - Democratic leaders are expected to abandon attempts to impose nearly $16 billion in new taxes on the oil industry with the revenue to be used to support renewable energy sources and conservation.

It remained unclear Friday whether more limited tax provisions aimed at ensuring extensions of tax credits and incentives for renewable fuels development will survive.

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