Obama Imposes Stricter Emissions Standards on Nearly Bankrupt, Bailed-Out Auto Companies

January 26, 2009 - 6:49 PM
Requiring more fuel-efficient cars will move the country toward energy independence, said President Obama. But allowing states to set their own emissions standards would impose burdens on other states and consumers, one conservative analyst said.

White House Press Secretary Robert Gibbs speaks, Monday, Jan. 26, 2009, during his daily press briefing in the White House Press Room at the White House in Washington. (AP Photo/Ron Edmonds)

White House (CNSNews.com) – President Barack Obama is forcing nearly bankrupt, taxpayer-bailed-out U.S. auto companies to meet stricter emissions standards for their automobiles. While environmentalists cheered, some analysts questioned the decision to impose greater burdens on car-makers that are struggling to stay in business. 
 
 The orders come at a time when the troubled U.S. auto industry is being kept afloat by a federal bailout.
 
“Car efficiency standards are sinking the auto industry at the same time they’re getting a government bailout,” said Sam Kazman, general counsel to the Competitive Enterprise Institute, a free market think tank. “Now the president’s policy will make that burden heavier.”

The president on Monday ordered the Environmental Protection Agency (EPA) to review a proposed California rule to set tougher limits, while also ordering the Department of Transportation to develop higher fuel efficiency standards for cars.

That means vehicles would have to attain 35 miles per gallon by the 2011 model years, White House Press Secretary Robert Gibbs said. The current standard is 27 miles per gallon.
 
Requiring more fuel-efficient cars will help put the country on the road to energy independence, said Obama. Supporters say it also would help combat global warming.
 
“President Nixon promised to make our nation energy independent by the end of the 1970s. When he spoke, we imported about one-third of our oil. Now we import more than half,” Obama said.
 
“The federal government will work with, not against the states,” Obama added. “For the sake of our security, our economy, and our planet, we must have the courage and commitment to change.”

The California order is a decisive break from the Bush administration’s EPA, which prohibited California from enacting the stricter limits because of concerns that non-uniform standards would be overly burdensome on automakers.
 
The manufacturers worry about having to meet multiple standards – meaning the toughest standard becomes the default position, said Bruce M. Belzowski, associate director of the University of Michigan’s Transportation Research Institute.
 
“What they end up doing is looking at the standard that is most strict, and then building all their vehicles to that standard, unless they are incapable technologically of meeting that standard,” Belzowski told CNSNews.com.
 
If allowed to stand, California’s standards would again be the toughest in the nation, just as they were in the 1990s. But even a decade ago, the Golden State allowed carmakers some “breathing room,” Belzowski said.
 
“California came up with some stringent requirements for the manufacturers, and when they could see that the manufacturers, in good faith, were trying to meet those standards but the technology wasn’t there, or they couldn’t do it quick enough, California would back off, and say, ‘We’re not going to abandon this, but we will give you a little more time to meet the standards,’” he added.
 
Detroit is out to impress its new stakeholder: government, Belzowski said.
 
“The Big Three understand that they have a new stakeholder that they never had before – and that’s the federal government,” he said. “They may not be owners of the company, but the companies owe the federal government a significant amount of money, especially GM and Chrysler.”
 
Already, 13 other states have shown interest in adopting the California model.
 
Some environmental activists praised Obama’s actions.
 
“By beginning this process and directing the EPA to review the Bush administration’s lack of action, President Obama is turning the federal government into a force for positive change instead of a roadblock,” said Carl Pope, executive director of the Sierra Club.
 
But allowing states to set their own standards could impose unneeded burdens on other states and consumers, said Ben Lieberman, senior energy and environmental analyst at the conservative Heritage Foundation.
 
“Letting states set the standards would interfere with the cost and availability of vehicles in other states,” Lieberman told CNSNews.com.