Obama administration postpones auto fuel economy proposal

Reuters Logo(Reuters) – The Obama administration will push back the release of the most ambitious proposal ever for automakers to improve fuel efficiency of their passenger cars, sport utility vehicles and pickups.

The U.S. Transportation Department and the Environmental Protection Agency intended to put out the draft plan for model years 2017-25 for industry and public comment by the end of this week.

But it was recently determined that more time is needed to complete the plan, so the deadline was extended. Regulators said they now hope to finish the work and publish the proposal by mid November.

Industry and environmental groups are eager to see how the administration plans to fill out a baseline agreement it struck in July with automakers and the state of California requiring the fleet to average 54.5 miles per gallon by 2025. That is equivalent to a 5 percent increase in annual efficiency.

The deal softens the impact for production of light trucks, such as pickups and SUVs — a mainstay of U.S. auto manufacturers General Motors Co, Ford Motor Co and Chrysler, which is run by Italy’s Fiat.

The administration would, with a short delay, remain on track to meet its deadline for issuing final rules next July, five years before they take effect. That timeline gives the industry room to plan its vehicle mix and make any production or technology changes.

The National Highway Traffic Safety Administration (NHTSA) and the EPA are jointly writing the regulation with California, which has important influence because of its huge market, its political standing with the Democratic administration and its environmental leadership role.

NHTSA did not say why the proposal timeline was changed other than to note in a statement that it was necessary “given the historic nature” of the plan and the coordination necessary between two federal agencies and California authorities.

COMPLEX, TIME-CONSUMING WORK

But sources familiar with the matter said the work is complex and time consuming. Regulators, they said, are purposely moving slower than anticipated to ensure that industry, environmental and consumer issues likely to be raised during a lengthy public comment period are addressed ahead of time.

Regulators also want to make sure the proposal can clear the White House budget office, which reviews proposed regulations, in a timely fashion.

The sources said the delay was not related to a House of Representatives Oversight Committee investigation of meetings between Obama administration and auto industry officials leading up to the July agreement.

Committee Chairman Darrell Issa, a California Republican, has raised concerns about the secrecy of the meetings and the agreement’s impact on consumers. He has asked companies to preserve all documents from their discussions with administration officials.

(Reporting by John Crawley in Washington; Editing by Richard Borsuk)

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