Obama unveils new fuel standards: 54.5 mpg by 2025

The Obama administration officially reveals new fuel economy standards: 54.5 miles per gallon equivalent by 2025, starting in 2017.

U.S. president Barack Obama on Friday officially revealed the next phase of his administration's push to increase fuel economy standards and reduce greenhouse gas pollution for all new cars and trucks.

These new standards, which will cover cars and light trucks for model years 2017 through 2025, require a performance equivalent to 54.5 miles per gallon in 2025 -- reducing greenhouse gas emissions to 163 grams per mile.

Obama reiterated that stricter fuel standards will reduce the nation's dependence on oil (by 12 billion barrels, or 2.2 million per day), protect the environment and save consumers money at the pump -- to the tune of $1.7 trillion dollars over a vehicle's lifetime, the administration estimates.

To add context to the oil savings figure, that's more than the U.S. imports from any other country except Canada. And as vehicles themselves become more efficient, then replace older models on the road, that figure is expected to climb to 4 million barrels per day, "nearly as much as we import from all OPEC countries combined."

As for the environmental impact, the standards are estimated to reduce carbon dioxide emissions by more than 6 billion metric tons -- as much greenhouse gases as the U.S. emitted last year.

CNET colleague Martin LaMonica details the technologies automakers will use to get there:

Rather than a dramatic shift to electric vehicles, the standards will prod automakers to consider technologies not yet been used en masse, such as alternative engine designs or microhybrids. Least visible to consumers will be improvements to internal combustion engines and lighter vehicles. Hybrids and microhybrids, also called start-stop technology where the engine turns off when the vehicle is idle, are poised for broader use as well.

So what's it all mean for automakers?

CBS MoneyWatch colleague Jerry Edgerton explains:

One reason Ford, GM and Chrysler may have gone along with the new regulation is that they got a lower standard for their profitable pickup trucks. The cumulative 2025 standard for cars is 60 MPG. But the lower truck requirement brings the overall average down to 54.5. (The White House had originally been pushing for a 62 MPG overall average, but Ford, General Motors and foreign automakers managed successfully lobbied for the lower figure.)

The hope, of course, is that the increased competition to offer fuel efficient vehicles reduces the premium on them, especially for those with electric powertrains. Win-win?

This post was originally published on Smartplanet.com