S 767 ISCommentsClose CommentsPermalink

To increase fuel economy standards for automobiles and for other purposes.CommentsClose CommentsPermalink

March 6, 2007

Mr. OBAMA (for himself, Mr. LUGAR, Mr. BIDEN, Mr. SMITH, Mr. BINGAMAN, Mr. COLEMAN, and Mr. SPECTER) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and TransportationCommentsClose CommentsPermalink

To increase fuel economy standards for automobiles and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the `Fuel Economy Reform Act'.CommentsClose CommentsPermalink

SEC. 2. FINDINGS.

Congress makes the following findings:CommentsClose CommentsPermalink





(1) United States dependence on oil imports imposes tremendous burdens on the economy, foreign policy, and military of the United States.CommentsClose CommentsPermalink





(2) According to the Energy Information Administration, 60 percent of the crude oil and petroleum products consumed in the United States between April 2005 and March 2006 (12,400,000 barrels per day) were imported. At a cost of $75 per barrel of oil, people in the United States remit more than $600,000 per minute to other countries for petroleum.CommentsClose CommentsPermalink





(3) A significant percentage of these petroleum imports originate in countries controlled by regimes that are unstable or openly hostile to the interests of the United States. Dependence on production from these countries contributes to the volatility of domestic and global markets and the `risk premium' paid by consumers in the United States.CommentsClose CommentsPermalink





(4) The Energy Information Administration projects that the total petroleum demand in the United States will increase by 23 percent between 2006 and 2026, while domestic crude production is expected to decrease by 11 percent, resulting in an anticipated 28 percent increase in petroleum imports. Absent significant action, the United States will become more vulnerable to oil price increases, more dependent upon foreign oil, and less able to pursue national interests.CommentsClose CommentsPermalink





(5) Two-thirds of all domestic oil use occurs in the transportation sector, which is 97 percent reliant upon petroleum-based fuels. Passenger vehicles, including light trucks under 10,000 pounds gross vehicle weight, represent over 60 percent of the oil used in the transportation sector.CommentsClose CommentsPermalink





(6) Corporate average fuel economy of all cars and trucks improved by 70 percent between 1975 and 1987. Between 1987 and 2006, fuel economy improvements have stagnated and the fuel economy of the United States is lower than many developed countries and some developing countries.CommentsClose CommentsPermalink





(7) Significant improvements in engine technology occurred between 1986 and 2006. These advances have been used to make vehicles larger and more powerful, and have not focused solely on increasing fuel economy.CommentsClose CommentsPermalink





(8) According to a 2002 fuel economy report by the National Academy of Sciences, fuel economy can be increased without negatively impacting the safety of cars and trucks in the United States. Some new technologies can increase both safety and fuel economy (such as high strength materials, unibody design, lower bumpers). Design changes related to fuel economy also present opportunities to reduce the incompatibility of tall, stiff, heavy vehicles with the majority of vehicles on the road.CommentsClose CommentsPermalink





(9) Significant change must occur to strengthen the economic competitiveness of the domestic auto industry. According to a recent study by the University of Michigan, a sustained gasoline price of $2.86 per gallon would lead Detroit's Big 3 automakers' profits to shrink by $7,000,000,000 as they absorb 75 percent of the lost vehicle sales. This would put nearly 300,000 people in the United States out of work.CommentsClose CommentsPermalink





(10) Opportunities exist to strengthen the domestic vehicle industry while improving fuel economy. A 2004 study performed by the University of Michigan concludes that providing $1,500,000,000 in tax incentives over a 10-year period to encourage domestic manufacturers and parts facilities to produce clean cars will lead to a gain of nearly 60,000 domestic jobs and pay for itself through the resulting increase in domestic tax receipts.CommentsClose CommentsPermalink

SEC. 3. DEFINITION OF AUTOMOBILE AND PASSENGER AUTOMOBILE.

(a) Definition of Automobile-CommentsClose CommentsPermalink





(1) IN GENERAL- Paragraph (3) of section 32901(a) of title 49, United States Code, is amended by striking `rated at--' and all that follows through the period at the end and inserting `rated at not more than 10,000 pounds gross vehicle weight.'.CommentsClose CommentsPermalink





(2) FUEL ECONOMY INFORMATION- Section 32908(a) of such title is amended, by striking `section--' and all that follows through `(2)' and inserting `section, the term'.CommentsClose CommentsPermalink





(3) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) shall apply to model year 2010 and each subsequent model year.CommentsClose CommentsPermalink





(b) Definition of Passenger Automobile-CommentsClose CommentsPermalink





(1) IN GENERAL- Paragraph (16) of section 32901(a) of such title is amended by striking `, but does not include' and all that follows through the end and inserting a period.CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply to model year 2012 and each subsequent model year.CommentsClose CommentsPermalink

SEC. 4. AVERAGE FUEL ECONOMY STANDARDS.

(a) Standards- Section 32902 of title 49, United States Code, is amended--CommentsClose CommentsPermalink





(1) in subsection (a)--CommentsClose CommentsPermalink





(A) in the heading, by inserting `Manufactured Before Model Year 2013' after `Non-Passenger Automobiles'; andCommentsClose CommentsPermalink





(B) by adding at the end the following: `This subsection shall not apply to automobiles manufactured after model year 2012.';CommentsClose CommentsPermalink





(2) in subsection (b)--CommentsClose CommentsPermalink





(A) in the heading, by inserting `Manufactured Before Model Year 2013' after `Passenger Automobiles';CommentsClose CommentsPermalink





(B) by inserting `and before model year 2010' after `1984'; andCommentsClose CommentsPermalink





(C) by adding at the end the following: `Such standard shall be increased by 4 percent per year for model years 2010 through 2012 (rounded to the nearest 1/10 mile per gallon)';CommentsClose CommentsPermalink





(3) by amending subsection (c) to read as follows:CommentsClose CommentsPermalink





`(c) Automobiles Manufactured After Model Year 2012- (1)(A) Not later than 18 months before the beginning of each model year after model year 2012, the Secretary of Transportation shall prescribe, by regulation--CommentsClose CommentsPermalink





`(i) an average fuel economy standard for automobiles manufactured by a manufacturer in that model year; orCommentsClose CommentsPermalink





`(ii) based on 1 or more vehicle attributes that relate to fuel economy--CommentsClose CommentsPermalink





`(I) separate average fuel economy standards for different classes of automobiles; orCommentsClose CommentsPermalink





`(II) average fuel economy standards expressed in the form of a mathematical function.CommentsClose CommentsPermalink





`(B)(i) Except as provided under paragraphs (3) and (4) and subsection (d), average fuel economy standards under subparagraph (A) shall attain a projected aggregate level of average fuel economy of 27.5 miles per gallon for all automobiles manufactured by all manufacturers for model year 2013.CommentsClose CommentsPermalink





`(ii) The projected aggregate level of average fuel economy for model year 2014 and each model year thereafter shall be increased by 4 percent over the level of the prior model year (rounded to the nearest 1/10 mile per gallon).CommentsClose CommentsPermalink





`(2) In addition to the average fuel economy standards under paragraph (1), each manufacturer of passenger automobiles shall be subject to an average fuel economy standard for passenger automobiles manufactured by a manufacturer in a model year that shall be equal to 92 percent of the average fuel economy projected by the Secretary for all passenger automobiles manufactured by all manufacturers in that model year. An average fuel economy standard under this subparagraph for a model year shall be promulgated at the same time as the standard under paragraph (1) for such model year.CommentsClose CommentsPermalink





`(3) If the actual aggregate level of average fuel economy achieved by manufacturers for each of 3 consecutive model years is 5 percent or more less than the projected aggregate level of average fuel economy for such model year, the Secretary may make appropriate adjustments to the standards prescribed under this subsection.CommentsClose CommentsPermalink





`(4)(A) Notwithstanding paragraphs (1) through (3) and subsection (b), the Secretary of Transportation may prescribe a lower average fuel economy standard for 1 or more model years if the Secretary of Transportation, in consultation with the Secretary of Energy, finds, by clear and convincing evidence, that the minimum standards prescribed under paragraph (1)(B) or (3) or subsection (b) for each model year--CommentsClose CommentsPermalink





`(i) are technologically not achievable;CommentsClose CommentsPermalink





`(ii) cannot be achieved without materially reducing the overall safety of automobiles manufactured or sold in the United States and no offsetting safety improvements can be practicably implemented for that model year; orCommentsClose CommentsPermalink





`(iii) is shown not to be cost effective.CommentsClose CommentsPermalink





`(B) If a lower standard is prescribed for a model year under subparagraph (A), such standard shall be the maximum standard that--CommentsClose CommentsPermalink





`(i) is technologically achievable;CommentsClose CommentsPermalink





`(ii) can be achieved without materially reducing the overall safety of automobiles manufactured or sold in the United States; andCommentsClose CommentsPermalink





`(iii) is cost effective.CommentsClose CommentsPermalink





`(5) In determining cost effectiveness under paragraph (4)(A)(iii), the Secretary of Transportation shall take into account the total value to the United States of reduced petroleum use, including the value of reducing external costs of petroleum use, using a value for such costs equal to 50 percent of the value of a gallon of gasoline saved or the amount determined in an analysis of the external costs of petroleum use that considers--CommentsClose CommentsPermalink





`(A) value to consumers;CommentsClose CommentsPermalink





`(B) economic security;CommentsClose CommentsPermalink





`(C) national security;CommentsClose CommentsPermalink





`(D) foreign policy;CommentsClose CommentsPermalink





`(E) the impact of oil use--CommentsClose CommentsPermalink





`(i) on sustained cartel rents paid to foreign suppliers;CommentsClose CommentsPermalink





`(ii) on long-run potential gross domestic product due to higher normal-market oil price levels, including inflationary impacts;CommentsClose CommentsPermalink





`(iii) on import costs, wealth transfers, and potential gross domestic product due to increased trade imbalances;CommentsClose CommentsPermalink





`(iv) on import costs and wealth transfers during oil shocks;CommentsClose CommentsPermalink





`(v) on macroeconomic dislocation and adjustment costs during oil shocks;CommentsClose CommentsPermalink





`(vi) on the cost of existing energy security policies, including the management of the Strategic Petroleum Reserve;CommentsClose CommentsPermalink





`(vii) on the timing and severity of the oil peaking problem;CommentsClose CommentsPermalink





`(viii) on the risk, probability, size, and duration of oil supply disruptions;CommentsClose CommentsPermalink





`(ix) on OPEC strategic behavior and long-run oil pricing;CommentsClose CommentsPermalink





`(x) on the short term elasticity of energy demand and the magnitude of price increases resulting from a supply shock;CommentsClose CommentsPermalink





`(xi) on oil imports, military costs, and related security costs, including intelligence, homeland security, sea lane security and infrastructure, and other military activities;CommentsClose CommentsPermalink





`(xii) on oil imports, diplomatic and foreign policy flexibility, and connections to geopolitical strife, terrorism, and international development activities;CommentsClose CommentsPermalink





`(xiii) on all relevant environmental hazards under the jurisdiction of the Environmental Protection Agency; andCommentsClose CommentsPermalink





`(xiv) on well-to-wheels urban and local air emissions of `pollutants' and their uninternalized costs;CommentsClose CommentsPermalink





`(F) the impact of the oil or energy intensity of the United States economy on the sensitivity of the economy to oil price changes, including the magnitude of gross domestic product losses in response to short term price shocks or long term price increases;CommentsClose CommentsPermalink





`(G) the impact of United States payments for oil imports on political, economic, and military developments in unstable or unfriendly oil exporting countries;CommentsClose CommentsPermalink





`(H) the uninternalized costs of pipeline and storage oil seepage, and for risk of oil spills from production, handling, and transport, and related landscape damage; andCommentsClose CommentsPermalink





`(I) additional relevant factors, as determined by the Secretary.CommentsClose CommentsPermalink





`(6) When considering the value to consumers of a gallon of gasoline saved, the Secretary of Transportation may not use a value that is less than the greatest of--CommentsClose CommentsPermalink





`(A) the average national cost of a gallon of gasoline sold in the United States during the 12-month period ending on the date on which the new fuel economy standard is proposed;CommentsClose CommentsPermalink





`(B) the most recent weekly estimate by the Energy Information Administration of the Department of Energy of the average national cost of a gallon of gasoline (all grades) sold in the United States; orCommentsClose CommentsPermalink





`(C) the gasoline prices projected by the Energy Information Administration for the 20-year period beginning in the year following the year in which the standards are established.CommentsClose CommentsPermalink





`(7) In prescribing standards under this subsection, the Secretary may prescribe standards for 1 or more model years.CommentsClose CommentsPermalink





`(8)(A) Not later than December 31, 2016, the Secretary of Transportation, the Secretary of Energy, and the Administrator of the Environmental Protection Agency shall submit a joint report to Congress on the state of global automotive efficiency technology development, and on the accuracy of tests used to measure fuel economy of automobiles under section 32904(c), utilizing the study and assessment of the National Academy of Sciences referred to in subparagraph (B).CommentsClose CommentsPermalink





`(B) The Secretary of Transportation shall enter into appropriate arrangements with the National Academy of Sciences to conduct a comprehensive study of the technological opportunities to enhance fuel economy and an analysis and assessment of the accuracy of fuel economy tests used by the Administrator of the Environmental Protection Agency to measure fuel economy for each model under section 32904(c). Such analysis and assessment shall identify any additional factors or methods that should be included in tests to measure fuel economy for each model to more accurately reflect actual fuel economy of automobiles. The Secretary of Transportation and the Administrator of the Environmental Protection Agency shall furnish, at the request of the Academy, any information that the Academy determines to be necessary to conduct the study, analysis, and assessment under this subparagraph.CommentsClose CommentsPermalink





`(C) The report submitted under subparagraph (A) shall include--CommentsClose CommentsPermalink





`(i) the study of the National Academy of Sciences referred to in subparagraph (B); andCommentsClose CommentsPermalink





`(ii) an assessment by the Secretary of Transportation of technological opportunities to enhance fuel economy and opportunities to increase overall fleet safety.CommentsClose CommentsPermalink





`(D) The report submitted under subparagraph (A) shall identify and examine additional opportunities to reform the regulatory structure under this chapter, including approaches that seek to merge vehicle and fuel requirements into a single system that achieves equal or greater reduction in petroleum use and environmental benefits than the amount of petroleum use and environmental benefits that have been achieved as of the date of the enactment of this Act.CommentsClose CommentsPermalink





`(E) The report submitted under subparagraph (A) shall--CommentsClose CommentsPermalink





`(i) include conclusions reached by the Administrator of the Environmental Protection Agency, as a result of detailed analysis and public comment, on the accuracy of fuel economy tests as in use during the period beginning on the date that is 5 years before the completion of the report and ends on the date of such completion;CommentsClose CommentsPermalink





`(ii) identify any additional factors that the Administrator determines should be included in tests to measure fuel economy for each model to more accurately reflect actual fuel economy of automobiles; andCommentsClose CommentsPermalink





`(iii) include a description of options, formulated by the Secretary of Transportation and the Administrator, to incorporate such additional factors in fuel economy tests in a manner that will not effectively increase or decrease average fuel economy for any automobile manufacturer.'; andCommentsClose CommentsPermalink





(4) in subsection (g)(2), by striking `(and submit the amendment to Congress when required under subsection (c)(2) of this section)'.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) IN GENERAL- Chapter 329 of title 49, United States Code, is amended--CommentsClose CommentsPermalink





(A) in section 32903--CommentsClose CommentsPermalink





(i) by striking `passenger' each place it appears;CommentsClose CommentsPermalink





(ii) by striking `section 32902(b)-(d) of this title' each place it appears and inserting `subsection (c) or (d) of section 32902';CommentsClose CommentsPermalink





(iii) by striking subsection (e); andCommentsClose CommentsPermalink





(iv) by redesignating subsection (f) as subsection (e); andCommentsClose CommentsPermalink





(B) in section 32904--CommentsClose CommentsPermalink





(i) in subsection (a)--CommentsClose CommentsPermalink





(I) by striking `passenger' each place it appears; andCommentsClose CommentsPermalink





(II) in paragraph (1), by striking `subject to' and all that follows through `section 32902(b)-(d) of this title' and inserting `subject to subsection (c) or (d) of section 32902'; andCommentsClose CommentsPermalink





(ii) in subsection (b)(1)(B), by striking `under this chapter' and inserting `under section 32902(c)(2)'.CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- The amendments made by this section shall apply to automobiles manufactured after model year 2012.CommentsClose CommentsPermalink

SEC. 5. CREDIT TRADING, COMPLIANCE, AND JUDICIAL REVIEW.

(a) Credit Trading- Section 32903(a) of title 49, United States Code, is amended--CommentsClose CommentsPermalink





(1) by inserting `Credits earned by a manufacturer under this section may be sold to any other manufacturer and used as if earned by that manufacturer, except that credits earned by a manufacturer described in clause (i) of section 32904(b)(1)(A) may only be sold to a manufacturer described such clause (i) and credits earned by a manufacturer described in clause (ii) of such section may only be sold to a manufacturer described in such clause (ii).' after `earns credits.';CommentsClose CommentsPermalink





(2) by striking `3 consecutive model years immediately' each place it appears and inserting `model years'; andCommentsClose CommentsPermalink





(3) effective for model years after 2012, the sentence added by paragraph (1) of this subsection is amended by inserting `for purposes of compliance with section 32902(c)(2)' after `except that'.CommentsClose CommentsPermalink





(b) Multi-Year Compliance Period- Section 32904(c) of such title is amended--CommentsClose CommentsPermalink





(1) by inserting `(1)' before `The Administrator'; andCommentsClose CommentsPermalink





(2) by adding at the end the following:CommentsClose CommentsPermalink





`(2) The Secretary, by rule, may allow a manufacturer to elect a multi-year compliance period of not more than 4 consecutive model years in lieu of the single model year compliance period otherwise applicable under this chapter.'.CommentsClose CommentsPermalink





(c) Judicial Review of Regulations- Section 32909(a)(1) of such title is amended by striking out `adversely affected by' and inserting `aggrieved or adversely affected by, or suffering a legal wrong because of,'.CommentsClose CommentsPermalink