transcript

How would you overcome America's dependency on foreign oil?

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MARCO WERMAN: I'm Marco Werman. This is The World. President Barack Obama's agenda today was all about the environment. Here he is at the White House Rose Garden.

PRESIDENT OBAMA: For the first time in history, we have set in motion a national policy aimed at both increasing gas mileage and decreasing greenhouse gas pollution for all new trucks and cars sold in the United States of America. And I want to...

WERMAN: The President also spoke about ground breaking greenhouse gas legislation starting to make its way through Congress. More on that shortly. First, The World's Jason Margolis has more about the new fuel standards for cars and trucks.

JASON MARGOLIS: The new standards will require auto makers to sell vehicles that get an average of 35 and a half miles to the gallon by the year 2016. The president says that's eight miles better than vehicles get today.

OBAMA: We will save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years. Just to give you a sense of magnitude, that's more oil than we imported last year from Saudi Arabia, Venezuela, Libya and Nigeria combined.

MARGOLIS: Ten car companies and the United Auto Workers are supporting the new requirements. The heads of GM, Ford, and Chrysler attended the President's announcement today. Environmental advocates were also pleased with today's news. Eli Hopson at the Union of Concerned Scientists says the new standards are a huge leap forward for the U.S. but small by comparison.

ELI HOPSON: The Japanese are expected to reach about 46, 47 miles per gallon, and the European Union is actually a little higher, it's about 49 miles per gallon. So, we're still not really even close to catching up with the rest of the world, but we're making progress.

MARGOLIS: Hopson says trying to reach the levels set by the EU or Japan within eight years would have been impossible. Some argue even the lower U.S. standard proposed today will be impossible to meet if car companies want to stay in business that is. Dennis Derosiers is an independent auto analyst in Toronto. He says, sure auto makers can build fuel efficient cars but Americans won't buy enough of them. That's a challenge not just for Detroit, but carmakers like Honda, Toyota, and Volkswagen as well.

DENNIS DEROSIERS: Canada is a good example of why the new fuel standard won't work in the United States. If you take the Canadian marketplace, we are one of the more fuel efficient markets anywhere in the world. And if we would find it impossible to meet the new standard, can you imagine America, who are the exact opposite of Canadians. Tell the minivan soccer mom to go out and buy a small little Toyota Yuris. And she'll just kind of look at you kind of crazy.

MARGOLIS: But carmakers do have nearly eight years to meet the new standard. Mauro Guillen at the Wharton Business School argues that's enough time to shift the American car buying mentality, if manufacturers step/

MAURO GUILLEN: Companies can introduce creative pricing policies, they can introduce better financing perhaps for more fuel efficient cars, and they can certainly also try to engage in heavy duty advertising and marketing to try to convey to people that it is important to preserve the fossil fuels and it is important to think about the environment.

MARGOLIS: In other words, can Americans start thinking about cars the way Europeans and Japanese do. For The World, I'm Jason Margolis.

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