Energy Bill Good News-Bad News: CAFE Compromise; RPS Stalemate

Nov 30: House Speaker Nancy Pelosi (D-CA) released a brief statement on energy legislation pending in Congress and an apparent agreement on the controversial issued of Corporate Average Fuel Economy (CAFE) standards. The Senate passed H.R. 6 on June 21 [See WIMS 6/22/07] and on August 4, the House of Representatives passed H.R. 3221 [See WIMS 8/4/07]. The bills have been stalled by the inability to appoint a Conference Committee [See WIMS 10/22/07]. The new compromise bill is expected to be voted on this week in the House of Representatives and the Senate.

Speaker Pelosi said, “CAFE will serve as the cornerstone of the energy legislation that will be on the House floor next week. We will achieve the major goal of increasing vehicle efficiency standards to 35 miles per gallon in 2020, marking an historic advancement in our efforts in the Congress to address our energy security and laying strong groundwork for climate legislation next year. We are confident that this final product will win the support of the environmental, labor and manufacturing communities. This landmark energy legislation 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. This comprehensive package will also include an increase in the Renewable Fuels Standard [RFS] and a Renewable Electricity Standard [RES], among other key provisions.”

On December 1, 2007, the Alliance of Automobile Manufacturers (AAM) President and CEO Dave McCurdy issued a statement saying, "The Alliance commends Congressional leaders for reaching agreement on an aggressive, nationwide fuel economy program. This agreement reflects much hard work and tough negotiating by many parties. Importantly, this agreement establishes nationwide fuel economy requirements for the next 12 years and beyond. Upon adoption of this legislation, Congress will have established aggressive, nationwide fuel economy requirements, concluding a longstanding debate.

"As we understand the agreement, these tough, national mileage standards merge provisions of both the Senate and House CAFE proposals. The agreement includes a number of necessary measures to help make the overall regulatory program more realistic and reasonable. Automakers are pleased that Congressional negotiators ultimately accepted the need for practical provisions like separate car and light truck standards and incentives for building more autos that run on non-petroleum-based fuels. The bill also provides mechanisms that help automakers balance the natural ups and downs of the product cycle.

"This historic legislation would not have been possible without the efforts of auto workers, dealers, suppliers, user groups and industry allies in the business community -- whose leaders and members participated in this process. One in 10 jobs in the U.S. is dependent on the auto industry. Indeed, no other industry is linked so much [to] U.S. manufacturing or generates more retail business and employment. We believe this tough, national fuel economy bill will be good for both consumers and energy security. We support its passage."

Representative John Dingell (D-MI), Chairman of the Committee on Energy and Commerce, who was instrumental in securing the CAFE deal, issued the following statement saying, "I have supported raising CAFE standards in a sensible and effective way, and I believe the agreement reached today prescribes standards that are both aggressive and attainable. After weeks of productive discussion and negotiation, we have achieved consensus on several provisions that provide critical environmental safeguards without jeopardizing American jobs." Dingell thanked Representatives Baron Hill (D-IN) and Lee Terry (R-NE) for their work on the compromise and said the deal would provide incentives to preserve approximately 17,000 domestic assembly plant jobs, and expand incentives for production of vehicles that run on biofuels such as ethanol or biodiesel.

Representative Ed Markey (D-MA), Chairman of the House Select Committee on Energy Independence and Global Warming and author of the 35 mile per gallon standard in the House, praised his colleague, John Dingell, for accepting this major step forward, and Speaker Nancy Pelosi for holding firm on the 35 mpg standard. Markey said, "I know this is a difficult step to take for America’s auto companies, but the status quo was helping neither our nation nor the companies themselves. I especially appreciate Chairman Dingell’s willingness to let this reform go forward at this time, with the nation heavily dependent on oil costing $90 a barrel.” Markey said that as the chief House proponent of the 35 mpg standard, he did not force a vote on the measure last summer in hopes that with the help of Speaker Pelosi and the Senate, an agreement could be reached that would unite the Democratic Caucus. He said, "This strategy now appears to be paying off."

U.S. Senator Dianne Feinstein (D-CA), an original backer of the Senate CAFE standards agreement, announced details of what she called a landmark, bipartisan agreement on CAFE standards reached by key Senate and House negotiators. Senator Feinstein said, “The House and Senate have reached an historic agreement that achieves the first major mileage efficiency increase in two decades. It will increase the mileage of the overall fleet of vehicles by 10 miles per gallon over 10 years. We have been able to reach an agreement with the House that achieves the goal of the 10-in-10 Fuel Economy Act, without affecting the integrity of the bill..."

According to the Feinstein release by 2025, the fuel economy increases for cars and light-duty trucks would: Save 1.1 million barrels of oil saved per year, or nearly half the oil imported by the United States today from the Persian Gulf. (Union of Concerned Scientists); Remove 192 million metric tons of global warming pollution in 2020, a savings that will continue to increase in subsequent years. (Union of Concerned Scientists); and Save American families $700 - $1000 per year at the pump, depending on driving habits, (based on a $3.00 gas price). By 2020, the standards are estimated to save consumers $22 billion in net consumer savings in that year alone, a savings that will continue to increase in subsequent years. The release includes details of the agreement which will require that beginning in 2011, the National Highway Traffic Safety Administration (NHTSA) will annually increase the nationwide average fleet fuel economy standards for cars and light trucks to achieve a standard of 35 miles per gallon (mpg) by 2020.

Senator Pete Domenici (R-NM), Ranking Member of the Senate Energy & Natural Resources Committee and outspoken opponent of the issued a statement on the apparent compromise saying, “From the beginning, I have been concerned that the lack of a formal conference committee would make it impossible to complete work on an energy bill that would contain the right priorities and have the votes to pass the Senate. It appears as though my fears have been well founded. For weeks, my staff, along with Senator Bingaman’s [D-NM, Chairman of the Senate Energy & Natural Resources Committee], has been engaged in good faith negotiations with the House under a defined set of parameters laid out at the start of the process. We have made substantial bipartisan progress toward finalizing a bill. The legislation we have been working on contained a robust, much-needed Renewable Fuels Standard, important provisions on energy efficiency and carbon sequestration, and a long overdue increase in fuel economy standards. The parameters agreed to by Speaker Pelosi and communicated to us by Senate Democrats did not include a renewable portfolio standard [RPS or RES].

“It appears, however, that Speaker Pelosi has gone back on her word and chosen to go her own path on the energy bill. The inclusion of a costly, ineffective Renewable Portfolio Standard (RPS) will make this bill untenable for many in the Senate. RPS may not be the only deviation from the negotiated bill text, as the Speaker appears willing to take advantage of the lack of a formal conference committee process and institute other changes in the bill as she sees fit. The Speaker expects the Senate to discard a negotiated, bipartisan agreement in favor of her bill without amendment. That is no way to pass legislation and is another in a long list of reasons why Congress has lost the faith and trust of the American people...

“At this time, I have instructed my staff to cease their work on the energy bill, since the final bill apparently will not be the product of our bipartisan negotiations. As someone who has been working for 35 years to forge bipartisan, good-faith compromises on tough issues like the federal budget and energy policy, I know that your word means everything. It is particularly disappointing for me to see that such a sentiment seems to be a thing of the past."

Access a release from Speaker Pelosi (click here). Access a release from AAM (click here). Access a release from Representative Dingell (click here). Access a release from Representative Markey (click here). Access a detailed release from Senator Feinstein (click here). Access a release from Senator Domenici (click here). [*Energy, *Climate]