President Ready To Announce Fuel Economy Compromise

DETROIT (WWJ) – Amid reports that the Obama Administration and major auto companies have agreed to a 54.5 mile per gallon fuel economy standard, the White House has scheduled a Friday event to officially announce the new standard.

All a White House spokesman would say is that the announcement deals with the next round of a coordinated national program to improve fuel efficiency for the years 2017 -2025.

“This program, which builds on the historic agreement achieved by this administration for Model Years 2012-2016, will result in significant cost savings for consumers at the pump, dramatically reduce oil consumption, cut pollution and create jobs,” said a White House Statement.

Those within in the auto industry consider a 54.5 mile per gallon fuel economy standard a stretch, but say it’s better than the 56.2 mile per gallon standard the administration had been talking about. Many environmentalists had been seeking a standard topping 60 miles per gallon.

Early reports had the domestic three companies signing off on the deal, as well as Honda and Hyundai. The Detroit News says Honda and Toyota are likely to sign off, but want to make sure they understand the agreement first. Some other carmakers expressed concerns about specific rules.

The new rules will mean more hybrids and electric vehicles, and more improvements on traditional internal combustion engines. The technology doesn’t come cheap.

“Advanced technology costs money, so we will see increases in car prices to offset all of the new technologies that will be needed to meet these fuel economy standards,” said Michelle Krebs of “As more of this technology is developed and you get economies of scale, then the price of the technology should not be so burdensome.”

The other variable is the cost of gasoline in 2025. That will determine how much consumers save in fuel costs, and whether that’s enough to offset the additional cost of newer vehicles.

After the White House announces the fuel economy proposal, experts at the National Highway Traffic Safety Administration will begin writing specific rules, that will be announced in another year.

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