New Fuel Efficiency Standards Will Save $65 billion, Reduce Vehicle Emissions 21%

April 01, 2010 3:13 pm ET — Chris Harris

Yesterday, President Barack Obama upset some environmental activists by announcing his intention to allow companies to drill for oil and gas off America's shores.

He made up for it today by issuing new fuel efficiency standards for American cars and trucks that would reduce tailpipe emissions by 21% and help American drivers save $65 billion in fuel costs.

According to the Washington Post:

The Obama administration finalized the first national rules curbing greenhouse gas emissions Thursday, mandating that the U.S. car and light-truck fleet reach an average fuel efficiency of 35.5 miles per gallon by 2016.

The new fuel efficiency standards, issued by the Transportation Department and the Environmental Protection Agency as the result of a May 2009 deal with the auto industry, represent a peaceful end to a contentious legal battle over how to regulate tailpipe emissions. At a time when it remains unclear whether Congress can pass climate legislation this year, the new rules also mark the White House's most significant achievement yet in addressing global warming.


The new CAFE standards move up goals set in a 2007 energy law, which mandated a 35-mpg average by 2020. Passenger cars and light trucks now are required to get an average of 27.5 mpg. As a result of the new rules, the U.S. vehicle fleet is projected to cut its greenhouse gas emissions 21 percent by 2030.


An administration official estimated that the new requirements may increase the average cost of a vehicle by about $1,000, but that the consumer would recoup that payment in three years, largely through fuel savings. Over the life of the vehicle, a vehicle owner would reap a net savings of $3,000.

While tailpipe emissions represent the largest source of greenhouse gas emissions in a car or truck, the coolant in air conditioning also contributes to a vehicle's carbon output.

The Natural Resources Defense Council estimates that in 2020, the new standards will save consumers $65 billion in fuel costs by cutting oil consumption by 1.3 million barrels a day, while also cutting carbon dioxide emissions by more than 220 metric tons that year.

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