Senate Rejects Auto Fuel Economy Bill 
Approves Industry-Supported Alternative 

H. JOSEF HEBERT / AP 29jul03

WASHINGTON—The Senate rejected a proposal to require a sharp increase in automobile fuel economy Tuesday after concerns were raised that it would lead to a loss of auto industry jobs and limit consumer's ability to buy larger cars and SUVs.

By a 65-32 vote, the Senate turned back a proposal offered by Sen. Richard Durbin, D-Ill., that would have required automakers to produce a fleet average of 40 miles per gallon by 2015, a dramatic increase from the current 27.5 mpg now required.

Instead, senators approved by a 66-30 vote an industry-supported measure that turned the issue over to the Transportation Department, which will be required to take into consideration an array of issues -- from job losses and highway safety to economic impact on U.S. auto manufacturers -- before any rule change can be made.

This would "create unnecessary hurdles to any significant increases" in fuel economy by the transportation agency, argued Sen. Jeff Bingaman, D-N.M., and open any future fuel economy decisions to an increasing number of court challenges.

"We are going backwards," said Bingaman.

The measure, offered by Sens. Kit Bond, R-Mo., and Carl Levin, D-Mich., prescribes no specific, mandated increase in corporate average fuel economy, or CAFE.

This "assures that future standards are based on sound science" rather than "a politically arbitrary figure" that would cause economic harm, argued Bond. "It requires increasing CAFE standards to the maximum extent feasible."

The debate came as Senate Republicans accused Democrats of not cooperating enough to get the complex, far-reaching energy legislation finished this week before the start of the Senate's summer recess. President Bush called Republican and Democratic senators to the White House on Tuesday to nudge the legislation along.

Democrats said they were trying to cooperate, but said the time frame was unrealistic given the complex nature of many of the issues -- from overhauling federal oversight of the electricity markets to trying to address climate change and finding a balance between energy production and conservation incentives.

Durbin, D-Ill., said the technology is available to make cars and even sport-utility vehicles use substantially less gasoline, but he said opponents are content "to wave a white flag and say we can't do it" and let foreign automakers develop the technology.

"The technology is there," he insisted.

Supporters of tougher fuel economy measures said the Senate cannot pass a comprehensive energy blueprint for America without doing something about fuel use by passenger vehicles, which burn two of every five barrels of oil used in the country each day.

A less ambitious proposal, expected to be introduced later Tuesday, would require SUVs, pickups and passenger vans to meet the same fuel economy requirements as passenger cars, not the current 20.7 mpg. Like the Durbin amendment, that measure, to be offered by Sens. Dianne Feinstein, D-Calif., and Olympia Snowe, R-Maine, has been opposed by the auto industry as well as unions. Its prospects were uncertain.

Most Republicans and a scattering of Democrats from states with large auto manufacturing plants supported the Bond-Levin amendment.

The average fuel economy for 2003 model vehicles on the road, including SUVs, was 20.8 mpg. That is a 6 percent decline from 1988, when auto fuel efficiency levels peaked, according to the Environmental Protection Agency. The EPA's figures are different from the formal CAFE standard because they are pegged to actual purchases, not fleet averages of cars built.

Opponents of stricter CAFE requirements argued that arbitrary increases in fuel economy requirements will force automakers to make smaller cars and lead to more deaths on the highways and less consumer choice in showrooms.

"What about choice? This is still America," said Sen. Trent Lott, R-Miss. He brought to the Senate floor a picture of a European mini-car, declaring, "I don't think we should be forced to drive that automobile."

Supporters of higher CAFE requirements scoffed at Lott's assertions, noting the car he singled out is designed to get 70 mpg, far beyond what any of the fuel economy proposals would require. They cited a National Academy of Sciences report that concluded that substantial increases in fuel economy are achievable using current technology -- such as advanced transmission designs, aerodynamic improvements and direct fuel injection -- without reducing vehicle size or jeopardizing safety.

Opponents of the tougher measures cited the same NAS report, which also acknowledged that when vehicles were downsized to make them more fuel efficient in the 1970s and 1980s, the result was an increase in highway deaths.

Senate Rejects Bill to Boost Fuel Economy 

H. JOSEF HEBERT / AP 30jul03

WASHINGTON—A new energy agenda being fashioned by the Senate will do little to force automakers to substantially increase fuel economy, although cars and SUVs gobble up 40 percent of the oil that is used daily in the United States.

The Senate turned back an attempt Tuesday to include in the energy bill a requirement that automobiles cut gasoline use by 45 percent over the next dozen years. Instead it approved an industry-supported measure that includes new requirements that must be considered before the government can imposing future fuel economy improvements.

With the auto fuel issue essentially disposed of, the senators planned to turn their attention Wednesday to electricity market issues.

Democrats have criticized a largely GOP-crafted electricity proposal, saying it fails to adequately address consumer protections -- an area of increased concern in the aftermath of the California power crisis and market abuses by Enron and other electricity traders.

Opponents to the tougher automobile fuel measure argued that manufacturers would be forced to stop making larger cars and SUVs, resulting in thousands of autoworkers to lose their jobs and forcing consumers to buy smaller, less safe vehicles.

Sen. Richard Durbin, D-Ill., called such claims a red herring and said his amendment, directing new cars achieved a fleet average of 40 mpg by 2015, was technologically feasible without making vehicles smaller or resulting in industry job losses.

But his amendment was rejected 65-32. Instead, senators by a 66-30 vote directed that the Transportation Department consider tougher fuel economy standards, but only after taking into account impact on jobs, highway safety and other issues that could adversely harm the U.S. auto industry.

It assures "that future standards are based on sound science" rather than "a politically arbitrary (mileage) figure," said Sen. Kit Bond, R-Mo., whose state has a half dozen auto production facilities.

But critics said it would create unnecessary hurdles to any significant increases in fuel economy by the transportation agency with future rules likely to be challenged more easily in court.

"We are going backwards," said Sen. Jeff Bingaman, D-N.M.

The average fuel economy for passenger vehicles has been declining since 1988 as more and more motorists have favored buying SUVs, as well as vans and pickups, that are not required to meet as stringent fuel economy standard as passenger cars. A number of senators were planning an amendment to close the gap between the SUV and passenger sedan requirement, but its prospect is uncertain in light of Tuesday's solid twin votes against more stringent CAFE standards.

The core of the anti-CAFE debate focused on jobs and consumer choice.

"What about choice?" asked Sen. Trent Lott, R-Miss. "This is still America."

Pointing to a picture of a European mini-car he had brought to the Senate floor, Lott declared: "I don't think we should be forced to drive that automobile."

Supporters of higher CAFE requirements cited a National Academy of Sciences report that concluded that substantial increases in fuel economy are achievable using current technology -- such as advanced transmission designs, aerodynamic improvements and direct fuel injection -- without reducing vehicle size or jeopardizing safety.

But they failed to sway enough senators. And opponents quoted from the same study, which also noted that when vehicles were downsized to make them more fuel efficient in the 1970s and 1980s, the result was an increase in highway deaths.

Senate Rejects Bill to Strengthen Consumer Protection
Against More Enrons

H. JOSEF HEBERT / AP 30jul03

WASHINGTON—Some Democrats complained that the Senate energy bill fails to protect consumers against the electricity market abuses that plagued much the West, but senators Wednesday narrowly rejected a provision that would have made illegal the unethical practices used by Enron and other marketers.

Sen. Maria Cantwell, D-Wash., during two hours on the Senate floor, catalogued in great detail the Enron manipulations, dubbed with such names as "Get Shorty" and "Fat Boy" and urged senators to make certain such practices are not repeated. They saddled consumers in her state and others in the West with huge, devastating electricity bills, she said.

"There's nothing in the bill that prevents Fat Boy from happening again," Cantwell maintained.

But senators rejected, 50-48, her amendment, which she said would have made it easier for consumers to get rate rebates if manipulative practices were discovered and would have made Enron-style market manipulation illegal under the Federal Power Act.

Sen. Pete Domenici, R-N.M., agreed that consumers across the West "were victimized by Enron, the Enron scandal and many others" but he argued that the bill already deals with those abuses.

"The bill does away with the Enron loophole" in federal oversight of electricity markets, said Domenici. "What happened before, won't happen again."

The Senate was battling the clock as Republican leaders hoped to complete the massive, complex energy legislation this week before leaving town for the summer recess. Majority Leader Bill Frist of Tennessee has threatened to keep lawmakers in town until the bill is finished. But many Democrats criticized the rush to complete the bill, saying some issues weren't being examined closely enough.

Domenci offered a modified electricity package aimed at answering some Democratic complaints that the bill should do more to protect consumers from market abuses. But critics said it falls short, especially since the bill also does away with a Depression-era law that for 68 years has limited mergers and other activities by large electric utility holding companies.

Sen. Jeff Bingaman, D-N.M., has proposed giving federal regulators additional clout to deal with utility mergers. The amendment was expected to be taken up later Wednesday.

The bill "does not do enough to solve the problem" of consumer protection once the restrictions under the 1935 law are eliminated, said Bingaman.

On Tuesday, the Senate turned back an attempt to include in the energy bill a requirement that automobiles cut gasoline use by 45 percent over the next dozen years. Instead it approved an industry-supported measure that includes new requirements that must be considered before the government can imposing future fuel economy improvements.

Opponents of the tougher automobile fuel measure argued that manufacturers would be forced to stop making larger cars and SUVs, resulting in thousands of autoworkers to lose their jobs and forcing consumers to buy smaller, less safe vehicles.

Sen. Richard Durbin, D-Ill., called such claims a red herring and said his amendment, directing new cars to achieve a fleet average of 40 mpg by 2015, was technologically feasible without making vehicles smaller or resulting in industry job losses.

But his amendment was rejected 65-32. Instead, senators by a 66-30 vote directed that the Transportation Department consider tougher fuel economy standards, but only after taking into account impact on jobs, highway safety and other issues that could adversely harm the U.S. auto industry.

It assures "that future standards are based on sound science" rather than "a politically arbitrary (mileage) figure," said Sen. Kit Bond, R-Mo., whose state has a half dozen auto production facilities.

But critics said it would create unnecessary hurdles to any significant increases in fuel economy by the transportation agency with future rules likely to be challenged more easily in court.

"We are going backwards," said Sen. Jeff Bingaman, D-N.M.

The average fuel economy for passenger vehicles has been declining since 1988 as more and more motorists have favored buying SUVs, as well as vans and pickups, that are not required to meet as stringent fuel economy standard as passenger cars.

The core of the anti-CAFE debate focused on jobs and consumer choice.

"What about choice?" asked Sen. Trent Lott, R-Miss. "This is still America."