Bush pushes ethanol, CAFE changes

Harry Stoffer | | Automotive News / WASHINGTON -- President Bush is calling for a dramatic increase in the amount of ethanol the nation produces as a substitute for gasoline.

The president, in his State of the Union address Tuesday night, said he wants production of alternative and renewable fuels to reach 35 billion gallons a year by 2017 -- about five times the current level.

The proposal is the principal part of his Twenty in Ten plan to reduce U.S. gasoline consumption by 20 percent in 10 years.

He also wants to revise fuel economy standards for cars and extend rules for light trucks, which he said would cut gasoline use by 5 percent.

Dependence on foreign oil "leaves us vulnerable to hostile regimes, and to terrorists, who could cause huge disruptions of oil shipments, raise the price of oil and do great harm to our economy," he said.

The renewed emphasis on ethanol, made mainly from corn and other farm products, was a victory for the Detroit 3. The companies' CEOs personally lobbied Congress and the White House on ethanol last year.

They promised to make half their fleets capable of running on fuel that is 85 percent ethanol and 15 percent gasoline -- a blend called E85 -- if the government took steps to guarantee greater fuel availability.

They have already built about 6 million flexible-fuel vehicles but few ever run on anything but gasoline.

The administration revised fuel economy rules for light trucks last year so that vehicles of different sizes have different fuel economy targets. Bush wants to apply the same methodology to cars before raising standards. The car standard, set at 27.5 mpg, has not been changed since 1990.

The overall truck standard is being raised to about 24 mpg by 2011.

Automakers are eager to keep standard setting in the hands of regulators and out of the hands of lawmakers, who they fear might set some arbitrarily high numbers.

Tom LaSorda, CEO of the Chrysler group, said earlier Tuesday that his company would look "favorably" on varying fuel economy targets for cars by size.

But Joan Claybrook, president of the consumer group Public Citizen, said the size-based system creates loopholes and government should continue to set fleetwide standards.