US auto giants safe under Bush energy plan: critics -

CHICAGO (AFP) -
President George W. Bush' name=c1> SEARCHNews News Photos Images Web' name=c3> President George W. Bush has trumpeted new proposals to cut US gasoline consumption and so ease the country's dependence on foreign oil. But critics saw little dramatic in the changes, and nothing to worry the Detroit auto industry.
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The bulk of the reductions targeted by Bush in his State of the Union speech are to come from increased use of alternative fuels, like corn-derived ethanol, by 2017.
That is something the "Big Three" US automakers have been lobbying for but which critics say will be hard to meet, with corn prices at 10-year highs and alternatives to corn ethanol years away.
The plan does call for the first major changes to US automotive fuel economy standards since the 1970s. But the cuts are relatively modest, at an average of four percent a year beginning in 2010 for cars and 2012 for trucks.
"This is a gift to Detroit," said Russell Long, vice president of the Bluewater Network, which lobbies for better fuel economy standards.
"If the president were serious he would call for a doubling of the nation's fuel economy standards," he said. "Instead he's squandering another tremendous opportunity to make substantial cuts in the nation's oil dependence."
Gasoline consumption would fall by three million barrels of oil a day if fuel economy standards were doubled, and this could easily be achieved within 10 years without sacrificing automobile safety or passenger comfort, Long said.
Joan Claybrook, president of consumer group Public Citizen, said that in any case, "ethanol is not widely available and even if (corn) farmers get more subsidies, they won't necessarily meet demand."
"Really what ought to happen is the Congress ought to mandate 40 mile per gallon (six liters per 100 kilometers) fuel economy within eight years -- that is very doable," she said.
But significant increases in fuel economy standards are simply not politically feasible, analysts said.
Detroit's automakers have long fought the "Corporate Average Fuel Economy" program.
CAFE requires carmakers to ensure that their passenger cars average no less than 27.5 miles per gallon, while their trucks -- including truck-based sport utility vehicles (SUVs) -- reach no less than 22.2 miles per gallon.
The federal program gives credits to automakers who beat the standard and imposes fines on those who exceed it.
Japanese automakers have accumulated massive credits because they have only recently begun offering full-sized trucks, and their vehicles have traditionally been smaller and more fuel-efficient than those of General Motors, Ford and DaimlerChrysler.
GM vice-chairman Bob Lutz recently said that tightening CAFE standards "effectively hands the truck and SUV market over to the imports, particularly the Japanese."
He compared forcing automakers to sell smaller, more fuel-efficient cars to "fighting the nation's obesity problem by forcing clothing manufacturers to sell garments in only small sizes."
But David Cole, chairman of the Center for Automotive Research, said the industry was complaining too much about stricter fuel efficiency.
"There will be pressure to increase fuel economy but they'll try to preserve the range of vehicles Americans want... I don't think we'll see dramatic changes in the shape of cars."
Americans are simply not willing to change their driving habits, Cole said, and it would be "dangerous territory" for politicians to do anything that would even hint at restrictions on vehicle size and power.
Applying pressure on the demand side is also unpalatable, said Bruce Harrison, auto analyst with Global Insight.
"Changing consumer behavior requires taxing fuel -- and there's no politician seeking re-election who's going to do that," he said.