Governors urge feds to consider jobs, costs in fuel standards

Washington — Michigan Gov. Rick Snyder and 14 other governors warned Wednesday that auto jobs could be at risk if the Obama administration adopts fuel efficiency regulations for 2025 that are too stringent.

"If fuel economy standards are increased too quickly, resulting in more expensive vehicles, many consumers can be expected to hold onto their older vehicles longer and defer buying a new car, which could put auto jobs across the country at risk," the governors said in a letter to the heads of the Transportation Department and the Environmental Protection Agency. The governors urged a "sensible" increase in fuel efficiency requirements.

In a telephone interview with The Detroit News on Wednesday, Snyder said he is worried about the impact of higher vehicle costs on the auto industry that is just now "getting back on its feet."

"This is a concern," he said. "Let's make sure we have a thoughtful dialogue."

Snyder said it's important to weigh all costs and benefits.

The White House told U.S. automakers in private meetings last week that it was considering requiring a fleetwide average of 56.2 mpg by 2025 — a move that could add at least $2,100 to the price of a vehicle. The 2025 standard would require automakers to improve fuel efficiency an average of 5 percent each year during the period.

Snyder noted that Americans in agriculture and other commercial fields need pickups and other large vehicles to do their work. "Let's make sure we understand we need an economic balance," he said.

The governors' letter comes as environmental groups are making a push to get the Obama administration to mandate at least 56.2 mpg. Automakers want more flexibility and are lobbying for a lower requirement.

After meetings with foreign automakers this week, the administration is beginning a second round of talks with U.S. automakers starting today.

"We appreciate the governors' support for a national fuel economy standard that will save American families money at the pump and keep the jobs of the future here in America, and we share their commitment to preserving affordability and consumer choice," White House spokesman Matt Lehrich said Wednesday.

The governors' letter to Transportation Secretary Ray LaHood and Environmental Protection Agency Administrator Lisa Jackson was signed by 14 Republicans and Kentucky Gov. Steve Beshear, a Democrat.

In Flex We Trust » 15 Governors Warn Against Tough Fuel Economy ...

The Obama administration needs to ensure it doesn’t set fuel economy standards for the 2017-2025 model years that are too aggressive, a group of governors wrote in a letter to the administration today.

The governors — 14 Republicans and one Democrat — said in a letter to Secretary of Transportation Ray LaHood and EPA Administrator Lisa Jackson that “overreaching regulations can place a significant cost burden on individuals, families and businesses in our states.”

The governors’ letter came after a group of former Republican EPA administrators, governors and members of Congress wrote to President Barack Obama last week asking the administration to pursue “aggressive” fuel economy standards for the 2017-25 model years.

The group, which included EPA administrators who worked for every Republican president since Richard Nixon, said a 6 percent annual increase in fuel economy standards by automakers would be “achievable and cost-effective.”

In today’s letter, the governors wrote that new fuel economy standards should allow consumers to drive vehicles that fit their lifestyles, as “Americans need a range of vehicles to meet their family and business needs.”

The new fuel economy standards also should avoid raising vehicle prices beyond buyers’ means, the governors wrote.

“If fuel economy standards increase too quickly, resulting in more expensive vehicles, many consumers can be expected to hold on to their older vehicles longer and defer buying a new car, which could put auto jobs across the country at risk and delay compliance with federal air quality standards.”

If fuel economy standards were increased to 62 mpg by the 2025 model year, vehicle prices would increase to a sum that would exceed the amount consumers save in fuel costs over a five-year period, according to a Center for Automotive Research study released this month.

Last week The White House met individually with representatives from the Detroit 3 to ask the automakers to analyze the impact of a 56.2 mpg fuel economy average by 2025. That would require a 5 percent annual increase in fleetwide averages starting in 2016, when 35.5 mpg will be the mandatory fuel economy standard.

Fast-track efforts

The administration plans to present its proposal to the Office of Management and Budget by the end of July, The Detroit News reported Tuesday.

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