Fuel economy continues to be a crucial area of concern for the US policy makers. The US has long been the leading nation in oil consumption with around 21 million barrels of oil per day. Approximately, 60% of the fuel is being imported from foreign countries. A major portion of this goes into the transportation sector. Close on the heels of the Arab oil embargo by OPEC in 1973, resulting in the oil crisis that gripped the US, the Congress passed the Energy Policy and Conservation Act in 1975 with an aim to reduce its oil dependence on politically unstable regions.
Among the policies, the most prominent one was the Corporate Average Fuel Economy (CAFE). Its main goal was to regulate fuel efficiency of every automobile made in the US and to double average new car fleet fuel economy by 1985. Since then, the CAFE standards have governed the fuel economy standards of light trucks and passenger cars, generating widespread deliberations among various groups belonging to automobile industry, environmentalists and economists. Experts say this landmark bill will help break the nation's $1 bn-a-day imported-oil habit, ease consumers' pain at the pump, generate thousands of jobs, and cut pollution.
The Senate has taken a huge step by passing the bill to increase the fuel economy standards from the current average 27.5 mpg to 35 mpg by 2020, but not before stripping of some of its other key components. The measure that talks about a national renewable electricity standard, calling publicly held utilities to use at least 15% of the electricity from alternative energy resources such as solar, bio-energy and wind, failed to garner enough support. The failure to push through the tax package could be a major setback to solar and wind companies which have been mushrooming rapidly, but are still lagging behind major energy resources.
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