Beep-Beep M’ Beep-Beep, Yeah!

House Speaker Nancy Pelosi, together with Senators Diane Feinstein and Daniel Inouye and other leading Senators, have pulled off agreement on the first significant increase in fuel economy standards since 1985.

Under the new fuel economy legislation hammered out on Friday, new cars, SUVs, minivans, and other light trucks will have to reach an average of 35 miles per gallon (mpg) by 2020.  This is a 40 percent increase over current standards, which have remained flat for more than two decades.  Real mileage actually fell over this period with the rise of the SUV.

The new legislation is a huge victory that turns this trend around.  In 2020, the new standards will cut America’s oil dependence by 1.2 million barrels day, save consumers more $40 billion a year at the pump, and cut heat-trapping carbon dioxide emissions by 200 million tons.  And the gains will only grow with each passing year as new cars replace old ones.

Equally important, Speaker Pelosi and the Senate leaders turned back the automakers' attempt to reverse the Supreme Court’s landmark decision last April that recognizes the Environmental Protection Agency's – and California’s – power to curb vehicle emissions of carbon dioxide and other global warming pollutants under the Clean Air Act.

The auto companies have long thumbed their noses at any increase in mileage standards, smug and secure behind the protection of Rep. John Dingell of Michigan, the powerful chairman of the energy and commerce committee.  But give Mr. Dingell due credit.  Earlier this year, he told the auto makers times were changing.  And in the end, Mr. Dingell agreed to support the Senate-passed standard of 35 miles per gallon by 2020.

Though Mr. Dingell won several concessions for the automakers, the final language is actually stronger than the version passed by the Senate last summer, because it drops an “off ramp” provision that would have let the Transportation Department weaken the standards below 35 mpg.

The big battle was over EPA’s and California’s power to curb carbon dioxide.  In addition to their defeat in the Supreme Court, the car makers lost another big case in September, when a federal judge in Vermont rejected their attempt to stop California from setting standards to cut global warming emissions from new vehicles 30 percent by 2016.  Sixteen other states, including Vermont, have adopted or are poised to adopt California’s standards.  (In November, a federal appeals court in San Francisco also rejected the administration’s paltry 1.5 mpg increase in SUV mileage standards, and sent them back to the Transportation Department to be strengthened.)

At the last minute, the automakers pushed for an amendment to overturn these court decisions and destroy EPA’s and California’s Clean Air Act authority.  Their amendment would have blocked EPA from setting global warming pollution standards any stronger than the Transportation Department’s mileage standards.  And since California is not allowed to set standards that are “not consistent” with EPA’s authority, this would have been a death blow to California’s pioneering clean car standards and to the 16 states that are following California’s lead.

The final language avoids this crippling step backwards with a “savings clause” that protects EPA’s and the states’ powers under the Clean Air Act.

The bill still has to clear the full House, where the Speaker has promised to marry it with strong mandates to increase wind, solar, and other renewable electricity, and to move towards the next generation of clean, “cellulosic” biofuels for cars and trucks.  Votes are expected in the House next week.

In the Senate, the fuel economy compromise has won over Senator Carl Levin and other auto industry allies.  Majority Leader Harry Reid is backing Speaker Pelosi's approach and has promised quick action.  But we could be in for a tough fight, because Republican Senator Pete Domenici has declared all-out opposition to the House renewable electricity standard.  Stay tuned.

Meanwhile, California awaits a final decision from EPA on its clean car standards.  The only thing that stands in the way is a normally routine "waiver" that EPA has given California more than 40 times in the past.  After long delay, EPA has promised to decide by the end of this year.  So, soon we'll see if the White House gets the message that Congress, the states, and the American people are sending about cleaning up our cars, fighting global warming, and cutting our crippling oil dependence.  Saying "no" to Governor Arnold Schwarzenegger and the leaders of 16 other red and blue states would seem to have its costs.