By John Whitesides
WASHINGTON (Reuters) - President Barack Obama took aim at climate-warming greenhouse gases on Tuesday and ordered the struggling auto industry to make more fuel-efficient cars under tough new national standards to cut emissions and increase gas mileage.
Obama said the national standards, announced at a White House ceremony attended by auto industry and union leaders, would reduce U.S. dependence on foreign oil and give five years of cost certainty to an industry battling to survive.
"The status quo is no longer acceptable," Obama said in an announcement that will pressure carmakers to transform and modernize the industry to produce more efficient vehicles.
"We have done little to increase fuel efficiency of America's cars and trucks for decades," he said, calling the standards the start of a transition to a clean energy economy.
Obama has made fighting climate change a priority, and lawmakers from his Democratic Party are this week wrangling over a historic bill many hope will provide broader guidelines for controlling greenhouse gas emissions.
Growing public support for efforts to battle climate change and the weakened state of auto companies, which are restructuring with the help of federal bailout money, gave Obama a window of opportunity to impose the rules.
Under the new vehicle standards, U.S. passenger vehicles and light trucks must average 35.5 miles per gallon (6.62 litres/100km) by 2016. Obama said that would save 1.8 billion barrels of oil over the lifetime of the program -- the equivalent of taking 58 million cars off the road for a year.
The Environmental Protection Agency would regulate and reduce tailpipe emissions for the first time under the standards.
The U.S. Congress does not have to approve the standards, which will be implemented through federal rules.
HIGHER PRICETAGS FOR CONSUMERS
The plan was praised by automakers and environmentalists but will mean higher price tags for consumers. The new program will add about $600 to the price of producing a vehicle.
Obama said car-buyers would recoup the money with the lower fuel costs realized under more efficient mileage standards.
"This is a winning proposition for folks looking to buy a car," he said. "In fact, over the life of a vehicle, the typical driver would save about $2,800 by getting better gas mileage."
The plan could cut deeply into voracious U.S. gasoline demand, dealing another blow to a refining sector hard hit by recession and bracing for more climate legislation.
The White House announcement came as U.S. gasoline prices soared for the second week in a row, with the latest pump cost up 7 cents over the previous week to $2.31 a gallon amid signs of an easing of the recession.
Obama was flanked at the ceremony by executives from 10 automakers, labor leaders. Gov. Jennifer Granholm of Michigan, whose state includes the capital of the beleaguered auto industry Detroit, also attended and embraced the plan for giving the industry cost certainty by setting a uniform national standard.
The plan resolves a long-running dispute between the government and California, which sought a waiver from federal law to impose its own tough standards on emissions. That could have led to a patchwork of different state regulations.
Obama said a series of lawsuits tied to California's efforts would be dropped. California would save money by avoiding the need for a special state compliance program.
California Governor Arnold Schwarzenegger attended the announcement and told reporters the weekend negotiations on the plan were "very intense."
"Then all of a sudden it all clicked and it came together," he said. "It really was a huge battle and the president has brought everyone together and now we're marching forward in the same direction."
The proposal is aimed at cutting climate-warming carbon emissions, which would fall by 900 million metric tons or more than 30 percent over the life of the program.
(Additional reporting by John Crawley, Lisa Lambert; Editing by David Storey)
