Obama Unveils Tougher Emissions Standards Plan

If enacted, the new fuel and emission standards for cars and trucks would save billions of barrels of oil by requiring that vehicle carbon dioxide emissions be reduced by about one-third and forcing the auto industry to build vehicles that average 35.5 miles per gallon.

Listen to President Obama's remarks on the emissions plan:

The new rules are expected to cost consumers an extra $1,300 per vehicle by the time the plan is finished in 2016. But President Obama said the fuel cost savings would offset the higher price of vehicles in three years.

The plan would effectively quash a feud between automakers and statehouses over emission standards -- with the states coming out on top but the automakers getting the single national standard they've been seeking and more time to make the changes.

"In the past, an agreement such as this would have been considered impossible," Mr. Obama said in the White House Rose Garden, flanked by key auto industry, labor and government officials. "That is why this announcement is so important, for it represents not only a change in policy in Washington, but the harbinger of a change in the way business is done in Washington."

He said the new rules amount to removing 177 million cars from the roads over the next 6 1/2 years. In that period, the savings in oil would amount to last year's combined U.S. imports from Saudi Arabia, Venezuela, Libya and Nigeria.

The plan, which will be proposed in the Federal Register of pending rules and regulations, must clear procedural hurdles at the Environmental Protection Agency and the Transportation Department.

The new standard would increase the fuel economy of automobiles sold in the United States to a minimum of 35.5 miles per gallon by 2016, up from the current average of 25 miles per gallon. The move cut four years off the timetable for greater fuel efficiency set by the 2007 energy bill passed by Congress.

The rules, which begin to take effect in 2012, will not affect cars already on the road. But they put in place a national standard that is as tough as that in California, which has been fighting for a federal waiver to create stricter emissions laws.

"President Obama has solved the energy and economic policy equivalent of a Rubik's Cube," Rep. Ed Markey, D-Mass., who was a principal author of a 35-mpg standard that Congress passed two years ago, told Politico.

Both environmental activists and automobile industry officials welcomed the news. Environmental activists praised the move as a proactive policy after years of government inaction and delay. Auto officials said that the new national standard would provide them with a clear timetable and goals to turn around their businesses at a time when the major automakers are in dire financial straits and seeking emergency financial help from Washington.

"We are pleased that President Obama is taking decisive and positive action as we work together toward one national standard for vehicle fuel economy and greenhouse gas emissions that will be good for the environment and the economy," Ford Motor Company released in a statement.

Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers, said the announcement clears up a years-old battle between state governments and Washington over regulating the auto industry.

"President Obama's announcement ends that old debate by starting a federal rulemaking to set a national program," said McCurdy. "Automakers are committed to working with the President to develop a national program administered by the federal government."

The 2016 fleet average for fuel efficiency will be 39 miles per gallon for cars and 30 miles per gallon for light trucks.

The auto industry will be required to ramp up production of more fuel-efficient vehicles on a much tighter timeline than originally envisioned. It will be costly; the Transportation Department last year estimated that requiring the industry to meet 31.6 mpg by 2015 would cost nearly $47 billion.

But industry officials -- many of whom are running companies on emergency taxpayer dollars -- said Obama's plan would help them because they would not face multiple emissions requirements and would have more certainty as they develop their vehicles for the next decade.