Perspective on Obama's Fuel-Efficiency Standards

WASHINGTON (Reuters) - President Barack Obama took aim at climate-warming greenhouse gases on Tuesday and ordered the struggling auto industry to make more fuel-efficient cars under tough new national standards to cut emissions and increase gas mileage. Obama said the standards, announced at a White House ceremony attended by auto industry and union leaders, would reduce U.S. dependence on foreign oil and give five years of cost certainty to an industry battling to survive.

"The status quo is no longer acceptable," Obama said in an announcement that will pressure carmakers to transform and modernize the industry to produce more efficient vehicles. "We have done little to increase fuel efficiency of America's cars and trucks for decades," he said, calling the standards the start of a transition to a clean energy economy.

Obama has made fighting climate change a priority, and lawmakers in Congress have begun wrangling over a historic bill many hope will provide broader guidelines for controlling greenhouse gas emissions. Growing public support for efforts to battle climate change and the weakened state of the U.S. auto industry, which is staying afloat through federal bailouts and restructuring at the government's direction, gave Obama a window of opportunity to impose the rules.

Criticism of Obama's announcement was limited, and focused on the higher production costs, the safety concerns created by producing lighter cars and fears from some observers about increasing government involvement in the industry. "The government is now designing our cars. It's out of the hands of vehicle manufacturers," said auto industry consultant Larry Rinek.

Under the new standards, U.S. passenger vehicles and light trucks must average 35.5 miles per gallon (6.62 litres/100km) by 2016. The current law, approved by the Bush administration, requires a similar gain by 2020. Obama said the new standards would save 1.8 billion barrels of oil over the lifetime of the program -- the equivalent of taking 58 million cars off the road for a year.

The Environmental Protection Agency would regulate and reduce tailpipe emissions for the first time under the standards. The U.S. Congress does not have to approve the standards, which will be implemented through rules developed by the Department of Transportation and Environmental Protection Agency, which could take more than a year to complete.